The journey so far…
Reflecting on a presentation I was writing very recently I realised that it was over 20 years since I produced my first corporate social responsibility report. In the previous decade I had drafted seemingly reams of copy for senior management teams on corporate governance and I felt it now was a good time to pause and reflect on how far we have come.
Back in 1993 when I considered myself young, those in the corporate communications arena saw the publication of the Cadbury Report on Corporate Governance as ground breaking. It was the first directive of requirements that set the checks and boundaries required for defining the roles of both executive and non-executive directives, as well as how the two should be distinguished. That publication was followed by The Greenbury Report, Higgs and Smith then Hampel, Sarbanes Oxley in the US and so on. Whilst these rules provided guidelines, and there were many early adopters and pioneers, there were also many companies who adopted a more cynical approach.
It seems that back in the day, many companies saw CSR / ESG as a box ticking exercise. Merely a set of compliance guidelines that they were required to navigate, or use to spin an alternative version of their corporate story. Ironically, some of those companies that apparently embraced the core values of transparent triple bottom line reporting were those who caused the most social and environmental impact. The pioneering companies included Shell and BP amongst others. I remember reading these well structured and engaging reports in the 90s, thinking to myself, ‘if only they weren’t harvesting the world’s finite natural resources in gas, petroleum and petrochemicals and consequently causing catastrophic environmental damage’, because these companies articulate themselves in such a compelling manner. Let’s be honest, I wasn’t inspired to join Greenpeace or become an activist but I did use these reports as the best in class benchmark to advise clients on future CSR and, more recently, ECG reporting.
My cynicism then as much as now, is whether companies truly embrace the values and seize the communications opportunity to tell a truly objective business story in an engaging manner that audiences can readily access and be impacted by. With all integrity I feel the world is a better place nearly thirty years on. Of course, it is still possible to find the old school ‘male, stale and pale’ management teams that schooled together or shared regiments but who over time can be seen to reward failure based on poor company performance but are rewarded through manipulated share buybacks and EPS performance. However, these days we are hopefully more enlightened. It tends to stand out when a company can’t capture the essence and value of its greatest resource, namely its people. Where the challenges lie these days is not in the desire to capture and reflect a good ECG story, but in how a company conveys it.
For a moment let’s summarise ESG objectives
The increasing importance of Environmental, Social and Governance reports is supported by the fact that investors and other stakeholders are wanting companies to disclose more about their sustainability and environmental, social and governance strategies. ESG reporting encompasses both qualitative narrative of topics as well as quantitative measures used to gauge a company’s performance against ESG risks, opportunities, and related strategies. ESG reporting is an ideal and effective means of enabling companies to answer in a single report a wide variety of concerns that stakeholders may want disclosing.
However, creating an ESG report can be challenging, as it must meet the requirements of the reporting methodology and have the right balance of information from the individual agendas. Moreover, the companies need to determine how to communicate relevant information and what ESG information and indicators to report to ensure clear and transparent messages as well as data.
This brings me back to my starting point of reflection. Having recently completed a presentation for a fascinating company in the technology and power generation sector; twenty years on from my first CSR report that consequently won the ACCA first time reporter, how do they stand?
ITM Power and effective ESG are a match made in heaven… potentially. This is a company for the future. It’s grown from its genesis in twenty years, with global leading technologies and international partnerships. The turnover is modest at £5-6 million but it’s potential is better reflected in its market capitalisation at around £2 billion. I believe that this company trajectory will be realised through delivering their technology to energy partnerships globally, it’s just a matter of time and resources.This company has the people, technology, partnerships and environmental benefits to reap its rewards. The company’s communications challenge lies in how they best convey their story to investors and stakeholders. ESG incorporates a matrix of topics within its three pillars of Environmental, Social and Governance reporting. With a little time with the management team and advisors, we would inform a clearly defined brief. By addressing the key audience needs though the relevant medium and by using appropriate copywriting and editorial guidance in conjunction with practical navigation features and signposting, IMT Power have an illuminating future. With such a story to tell I would expect it to be best in class.