by Koray Camgöz
Purpose is not a PR issue, it’s a business imperative. Aside from communicating purpose, PR practitioners have a role to play in helping businesses understand theirs.
You’ll learn:
• The data making the argument for conscious capitalism
• How a high ESG score enables greater access to capital
• About PR’s job in reducing the say-do gap and ensuring organisations and leaders live up to the values they profess
2020 lit the match that sparked an explosion of global change. This year has seen seismic shifts in the way we think about work and life. The speed of change has been remarkable; cultural trends that would have developed incrementally over generations have occurred within months.
Change is the currency of public relations. A PR professional’s job is to inspire change in thoughts, attitudes and behaviours. We mediate the interests of stakeholders and help organisations to navigate their way through complexity. PR is ultimately about helping organisations understand their place in the world.
Business has reached a critical juncture in 2020. The year has been characterised by fluidity and uncertainty, while expectations of how firms should operate have shifted rapidly in a short space of time. Public relations professionals are uniquely positioned to steer businesses through this period. This chapter reflects on the turbulence of 2020 and the impact it will have on the trajectory of public relations practice.
The litmus test for purpose-led business
It’s often said that a crisis lifts the veil on an organisation. The same could be said for a global practice. A crisis cuts through the crap and shines a harsh light on your reality.
What did you need? What could you do without? What do you really stand for?
In many ways, COVID-19 provided the litmus test for purpose-led business.
There was a groundswell of momentum behind the idea that businesses should prioritise people and planet above (or at least beside) profit. PR professionals championed the notion feverishly, inspired by conscious consumers eager to align themselves with brands that reflect their values.
But was it a genuine aspiration for businesses? There were concerns that the harsh realities of a brutal recession would cripple the movement towards purpose-led business. Many feared that environmental, social and corporate governance (ESG) would take a back seat while businesses grappled with the threat of extinction.
‘Why care about society and the environment when you’re struggling to pay staff and your business is on the verge of collapse?’
So, has the pandemic forced business to abandon purpose and revert to traditional capitalist models? The short answer is no.
The S&P 500 ESG index, which tracks large U.S. companies with high ESG ratings, outperformed the conventional S&P 500 index in the first four months of 2020 when the crisis took its grip. The data proves that businesses do well when they do good.
There’s growing evidence to support the assertion that the COVID-19 crisis delivered a shot in the arm for conscious capitalism. A Blackrock report on ESG published in May reported “...this period of market turbulence and economic uncertainty has further reinforced our conviction that ESG characteristics indicate resilience during market downturns.”
So rather than stamp out this trend, the pandemic has accentuated the need for businesses to prove they care about more than money.
“Great occasions do not make heroes or cowards; they simply unveil them to our eyes. Silently and imperceptibly, as we wake or sleep, we grow strong or weak; and at last some crisis shows what we have become.” Brooke Foss Westcott
It’s an encouraging development. As Brooke Foss Westcott references in the quote above, a crisis shows us what we’ve become. In this instance, it’s tested the business community’s resolve and shown that ESG is here to stay.
At an event earlier this year the former Vodafone Corporate Affairs Director and Partner at Blurred, Matt Peacock, astutely pointed out that: “While capitalism was the cause of many of society’s ills, capitalism itself has the potential to provide the cure.”
Based on the growing body of evidence, it’s hard to disagree.
‘Stakeholder capitalism’ and the future of purpose
The fragile state of public health in 2020 has undoubtedly focused minds on corporate governance and sustainability. The pandemic dished out a lesson in the futility of obsessive pursuit of profit. The togetherness shown by communities across the world and the widespread support for key workers lent credence to the belief that society - and the businesses that operate within it - should focus on more than making money.
JPMorgan reasserted this view in June earlier this year: “The rebound in civil society has been impressive, with an increase in volunteering, social cohesion, community support and focus on public good vs. private freedoms - we see the COVID-19 crisis accelerating the trend to ESG investment.”
In summary, they concluded: “COVID-19 is accelerating the trend of stakeholder capitalism and challenging shareholder primacy.”
Stakeholder capitalism is not a new concept. Developed in 1932 by Adolf A Berle and Gardiner C Means, it argued that business should focus on meeting the needs of all stakeholders; from customers to employees and partners. It promoted the belief that companies should hire professionals to balance the interests of all stakeholders while taking public policy into account.
Sound familiar? It should if you work in public relations.
It’s encouraging that corporate heavyweights are talking up the importance of stakeholder capitalism. But let’s face it, the moral case alone was never going to cause businesses to double down on their social values. To get the root of the cause, it pays to follow the money trail.
One of the key factors driving adoption of ESG values is access to cheap capital. Banks and lenders offer more competitive rates to firms with high ESG scores. For companies borrowing billions, small gains in percentage lending rates equate to vast sums of cash.
Opportunities for public relations
These trends offer public relations professionals two key opportunities. Firstly, purpose is not a PR issue, it’s a business imperative. But corporate communicators, PR and marketing professionals all have a pivotal role to play in articulating a company’s values and vision. As storytellers, we hold the power to shift perceptions at a critical point in time for businesses.
But we also have broader calling. Aside from communicating purpose, PR practitioners have a role to play in helping businesses understand theirs.
Plugged in to all areas of the business, the modern strategic communicator has a birds-eye view of the stakeholder environment and an unrivalled understanding of how a firms’ actions impact its stakeholders. That vantage point empowers PR professionals to deliver tremendous insight to the C-suite that can help shape how a business thinks, feels and acts.
That’s always been important - but it’s become critical in 2020. The tragic murder of George Floyd, which sparked global outrage at racial inequality, is a perfect of example of how business is subservient to public sentiment.
Businesses now need to demonstrate tangible action on the issues people care about. Those that are out of step with the public mood will pay the price. Well-crafted statements, commitments and intentions no longer cut it. If 2020 has proved anything, it’s that people’s tolerance for bullshit has disintegrated.
The reputational stakes have been raised. The modern PR professional influences how a business acts as well what it says. Our job is to reduce the say-do gap, ensuring organisations and leaders live up to the values they profess. This strategic element of practice is on the rise. According to the latest ICCO World PR Report, agency owners across the globe attribute almost a third of all growth to strategic consulting. The turbulence of 2020 looks set to turbocharge that shift.
Put short, purpose is here to stay - the business case is now indisputable. But for PR professionals, the events of 2020 have crystallised the value of what we do and the impact we can have on organisations, communities and the wider world. It’s an extraordinary time to work in public relations.
Koray Camgöz is an internationally experienced communications director with a track record of crafting impactful strategies that deliver business results.
He is the PRCA’s Director of Communications & Marketing and recently played a key role in shaping the industry’s response to the COVID-19 pandemic. Koray also leads the Association’s work on equality and inclusion, which recently included changes to the PRCA’s governance structure.
He began his career at a PR agency in New York and spent seven years at the CIPR, before joining the PRCA last year. He holds a masters degree in media and communications, a PR diploma and is a Chartered PR Practitioner.
Twitter: @korcomms
Online: linkedin.com/in/korayc/