by Jon White
The COVID 19 pandemic accelerated changes already underway and has placed new emphasis on priorities identified before the pandemic. Before the pandemic, we were well aware that technology is transforming business and working practices. The pandemic showed how dependent we have now become on technology to conduct business, and how much we need it now to maintain social connections.
Among the priorities re-emphasized, we can include concerns for environmental impacts, social consequences of economic activity and the adequacy of arrangements for corporate governance. None of them new, but we are reaching a point where action now needs to be taken to address them.
The concerns are now bundled together under the heading of ESG and presented for management under this heading, used since the early 2000s by organisations such as the United Nations.
The renewed emphasis on ESG creates opportunities for public relations and its development. Since at least the 1970s public relations has dealt with issues relating to the environment and the social consequences of business activities, as well as the need to broaden management capability to make decisions relating to social questions and the needs of a range of stakeholders over and above investors and customers.
Vuelio Report, ESG Opportunities for Public Relations
These opportunities are set out in a paper written by Stephen Waddington and myself and published in early May 2021 by Vuelio, an organisation offering services to over 3000 clients providing software and support to aid public relations and public affairs practice.
The paper provides a snapshot of current thinking on ESG, describing what it is, how it has been acted upon up to this point and is likely to be taken further in future. Research cited in the paper suggests while practitioners and organisations are relatively unprepared – still – for managing ESG, business leaders are convinced that ESG concerns will become increasingly important in the near future.
A crunch point
Opportunities for public relations follow on from the fact that we are reaching a crunch point in dealing with ESG concerns:
Climate change is now recognized as an existential threat -- US President Biden has suggested that this is the decade in which we have to act on environmental protection. Great hopes are attached to the next UN conference on the environment, COP 26, planned for Glasgow in November 2021
The pandemic has laid bare inequalities between countries in availability of health care. It has also affected different groups within countries more or less severely, with the worst impacts felt by groups more susceptible to infection or economically disadvantaged. There is recognition, now, that current economic arrangements, business practices, are not delivering equally across identifiable social groups
Corporate governance, found wanting in dealing with the economic crisis of 2008, has not developed sufficiently to deal with new challenges. Its purpose, an ACCA consultation of 2014 suggested, is to create sustainable value. To do this, it will need to call on greater diversity in decision-making and new skills, presently lacking
It is time for action on ESG concerns. Too often in the past, as the Vuelio report makes clear, commitments are made to act on them but these are rhetorical rather than real. Critics talk of ‘greenwashing’, where claims are made for environmental action which are not realised, or made for ‘cosmetic’ reasons. On corporate governance, lip service is often paid to increasing diversity.
Business leaders are recognizing the need for fundamental change to the ways in which businesses are run. In 2019, the US Business Roundtable expanded the obligations of business to serve all stakeholders, rather than simply meet the interests of shareholders.
In response to ESG concerns, stakeholder capitalism will create its own demands. According to McKinsey, "Sustaining value creation requires accountability, communication, and updating. It is a process, not a result. For stakeholder capitalism to take root, think years, not months."
Opportunities for public relations
FuturePRoof has looked in the recent past at the opportunities open to public relations to make a greater contribution to strategic, long term management practice.
ESG concerns and the need to respond to them urgently add to these opportunities. Public relations, quite apart from drawing on communication as central to practice, has developed expertise in scanning, monitoring and understanding developments in organisations’ wide social environments.
Ability to do this has been enhanced over recent years by technology and the possibilities of capturing data relating to the current interests and behaviour of stakeholders.
Skill and insight in data interpretation increase the value of public relations advice and the contribution it can make to high-level decision-making and, now, to improvements in corporate governance.
Since the 1970s, expertise in issues management has been developed in public affairs. This includes anticipation, understanding of issue life cycles, and points at which interventions should be made in public debate on issues.
These skills and more will be needed in effective leadership on ESG concerns. The challenge for practitioners will be whether or not they wish to take up the opportunities presented by ESG.
Dr Jon White is a chartered psychologist and a chartered member and Honorary Fellow of the CIPR. He began his career in communication roles with the Government of Alberta, Canada, progressing through university positions in Canada and the UK to independent consultancy for organisations including large corporations and international government organisations.
The author of two books on public relations, he holds a doctorate in psychology from the London School of Economics and Political Science and is a Visiting Professor at Henley Business School, University of Reading and Honorary Professor, Cardiff University School of Journalism, Media and Culture.
Twitter: @DrJonWhite