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What is ESG and how does it differ from CSR?

What is ESG?

If you’ve been spotting it cropping up but don’t know what it is, I’ve got you covered.

Environmental, Social and Governance (ESG) is growing in popularity and conversations about it are increasing. (CSR stands for Corporate Social Responsibility).

I’ve been spotting ESG with the word Corporate added before Governance, so don’t be surprised if you see that too.

I invited Gihan A.M. Hyde back to the All Things IC blog to share her advice to help other internal communicators learn more about ESG and discover what we need to know.

Gihan is CEO & Founder of Communique, a corporate communication social enterprise start-up specialising in clarifying and amplifying a company’s Purpose, its Environmental and Social Governance (ESG) and building communication departments for start-ups and Scale-Ups.

Prior to founding “Communique” Gihan says she led some of the largest change projects and communication departments including Barclays IA, HSBC AMG, M&S HR, Philip Morris, the Riyadh Metro Project and the Department for International Trade. She has won various awards for her Comms work, which impacted more than 150,000 employees and closed $300m worth of sales deals.

Regular readers of my blog may remember her previous articles including: Diary of a female communicator in a world of 30,000 men and How to start a conversation about racism and unconscious bias.

I’ll pass you over to Gihan who has written a blog to explain what ESG is and how it is different from CSR…

What is ESG and how does it differ from CSR?

I was first introduced to Environmental and Social Governance (ESG) last year when I was in BP.

At the beginning I felt confused, lost and unclear on what exactly it entailed and how it was different from Corporate Social Responsibility (CSR) but most importantly, I wondered how it could be best communicated?

This is what led me to spend the last nine months researching the topic and trying to demystify it.

While I was doing so I launched Communique, a communication social enterprise start-up specialising in Environmental and Social Governance (ESG) and Purpose communication.

The term ESG is a new term that came to life by investors.

The story of ESG investing began in January 2004 when former UN Secretary General Kofi Annan wrote to over fifty CEOs of major financial institutions, inviting them to participate in a joint initiative to find ways to integrate ESG into capital markets Source: Forbes.

From talking to hundreds of CEO/Founders I found that most CEOs and Board Members understand the importance of the topic but moving to the next 2 levels down is where the focus starts to blur, and the understanding of its importance and what role they play in the journey starts to lessen.

Therefore, when communicating ESG I believe we should focus on tier 3, 4, 5 if our campaigns are to succeed.

In this blog I explain each component of the ESG and how it differs from CSR using two infographics.

Now that we understood what ESG entails and what “hot” topics most of my clients are focusing on, here is a slide that would explain how it is different from CSR.

From both slides you can see that they are both linked yet different.

One holds your organisation accountable while the other measures your commitments to your environment, social and governance impact.

If this topic is of interest to you or a priority to your organisation, I would recommend you read the UN Sustainable Goals (SDGs) as they will add an extra layer of explaining ESG.

Gihan can be reached on LinkedIn or Twitter.

Post author: Gihan Hyde.

Thank you for demystifying ESG for us Gihan. What do you think about what you’ve read? I hope you enjoyed reading it as much as I did.

As ever, you’re welcome to get in touch. Feel free to comment below or Tweet me @AllThingsIC.

Thank you for stopping by

Rachel

First published on the All Things IC blog 4 March 2021.

 

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Comments

  1. Laura says:

    I had the pleasure to meet Gihan last week, and we discussed about our role as internal communicators in clarifying what ESG means for our organisation, and in bringing our colleagues on this journey with us. We play a pivotal role in creating a clear and engaging comms plan that clarifies the deep connection between the company strategy and its ESG plan (or goals/ambitions). Employees need to understand why we are doing what we are doing and what their contribution is in order to believe in it and become real ambassadors (also externally), regardless of their role and function within the organisation.

    Another big challenge for IC professionals!

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