Latest News

How to solve the PR industry’s ESG problem

11th November 2022 By Luke Cross
Back to latest news

PR and marketing are often depicted as the protagonists of greenwashing – but credible communications actually runs to the heart of ESG

The PR industry has a PR problem.

Time and time again it is blamed for the greenwashing that many believe is undermining ESG and sustainability efforts.

Unfortunately, such accusations are often well founded – whether it be intentional or inadvertent greenwashing; flagrantly misleading, over-excitedly overegging sustainability commitments, slipping into loose language or not telling the whole story when talking up green credentials (like how much a client invests in fossils fuels alongside the number of trees it’s helping to plant).

At the root of the problem is what is meant by ESG – and consequently how we talk about it.

In trying to make technical topics more accessible and engaging, there is always a danger of diluting meaning.

ESG isn’t the same as saving people and planet. In the finance world it’s technically not even interchangeable with making positive impact.
It’s a framework for managing risk – and specifically, the impact of the outside world on a business in the context of environmental, social and governance-related issues (for example, how a business is managing climate change risk).

Now, as the great ESG debate rages on, the term is evolving.

It may even be undergoing semantic change as more and more businesses lump ESG together with responsible business and impact. For better and worse, we’ve seen this happen with other words and phrases that have been chewed up by the mainstream; woke, divest, myriad, egregious and cheater are a few examples that some might associate with the current state of ESG.

Even across the investment industry – where ESG is rooted – the term is used interchangeably with impact and sustainability on investor websites and marketing.

This is a problem because the way they’re being talked about isn’t necessarily how they’re being applied to investments.
Of course the financial sector has come up with its own rather opaque terminology for all this.

The phrase ‘double materiality’ is the closest thing to the public perception – considering the material risk to a business combined with the impact of the business on the outside world.

(Not exactly catchy is it?)

And most recently in the UK, we’ve seen the FCA attempt to better define the term ‘sustainable’ as it applies to investment products, with a view to protecting consumers and ending the pick’n’mix approach to ESG, green and sustainable labels.

Personally, I don’t think the concept of adopting ESG as something that also considers impact is a problem in of itself – in fact, I very much welcome it.

But what’s critical is that anyone using the ESG term sets it in the context within which it is being applied.

And that is where the PR industry is falling short.

ESG is a complex and evolving concept, open to interpretation and manipulation, subject to much debate, discourse and derogation – and in the crosshairs of political activists and regulators alike.

It may well be that ESG continues to evolve into something that ultimately becomes impact.

But we’re not there yet – and it’s crucial therefore that we as communications professionals cut through the noise, not add to it.

Because the bigger picture is that ESG is one of the levers we have for helping the financial services industry use its immense power and influence to move the dial on climate and social change.

On a fundamental level, investors and businesses that put ESG and sustainability commitments out there are easier to call out and hold to account if they’re not walking the talk.

I see that as progress in itself – albeit many will say it’s too little too late.

Whatever your position on that, one thing is clear – the role of communicators couldn’t be more vital, both in terms of external and internal communications and stakeholder engagement.

Comms people shouldn’t be the ones driving ESG across a business.

In any organisation it’s a collective effort, and therefore comms absolutely should be helping to navigate and shape the way a business applies ESG, ideally by connecting the internal operations, culture, purpose, governance and values of the business with the ESG approach.
Central to this is clarifying what ESG means to the business in relation to priorities, commitments, risks.

We don’t have to do it all – others are probably better placed to carry out things like materiality risk assessments and comms shouldn’t be anywhere near assurance statements.

But the PR industry can play a central part in ESG’s evolution.

It may even be able to move the dial to impact.

Wouldn’t that be a nice legacy for an industry that is so often cast as the bad guys?