Ed. note: Today’s contribution is from Brad Brooks-Rubin, who authored this in his personal capacity based on a collection of his experiences. Brad has an extensive background in responsible sourcing and ESG matters from his work at the Economic Bureau at the State Department during the introduction of Dodd-Frank 1502 to lawyering at a major law firm advising clients on business and human rights issues. He currently works for the NGO The Sentry and is a Strategic Advisor and North America Engagement lead for a standard-setting/certifying organization in the jewelry industry.
Since tomorrow is Good Friday and the first night of Passover, this blog will take the day off. Happy Easter and Happy Passover to those who celebrate the holidays, and Ramadan Mubarak to those observing the holy month. Enjoy the weekend and we’ll see you back here on Monday!
In the last few days, PracticalESG.com posts discussed that companies should be wary of relying on claims that they cannot defend and that automated ESG data still needs to be validated. ESG issues are not going away, and not just because they are becoming an increasing focus of regulators. Companies are starting to ask, “I get what I shouldn’t do, so what should I do?”
NGOs/activists play a key role in identifying ESG concerns and bringing them to public attention through their reports. I have been involved in both the creation and consumption of such reports, and also played the role of translating these reports for a range of company members. I’ve wrestled with ESG-related risks from other perspectives as well with different interests in mind.
Here are a few suggestions to answer “what should I do?” These aren’t necessarily the most “practical,” if you define that term as something that is simple, straightforward, and easily turned into an SOP. But if you define “practical” as what your practice should be, then this can be helpful advice about what at least some of us in the activist and regulatory spaces are thinking:
- First and above all, as the Nestle case shows, be honest. Honesty about what you are doing to address ESG risks, why, what you are hoping to do in the future but cannot do now, what you will likely not do because of capacity, cost, or otherwise. Perhaps more importantly, what are your results – good, bad, neutral, undetermined, in progress, etc – so far. That means being honest and direct with your own teams and leaders internally and externally in clear, simple, and succinct language – not buried in 100 page reports.
- Second, channel Dr. Strangelove and learn to love “bad news.” We read in one biography of successful business leaders after another that they thrive on failure and try to learn and get better from it. Shows us that on the ESG side. Where have you tried and failed to address a risk? What will you do better next time? You may have to train Comms and Marketing teams to get used to this, but it will go a long way.
- Third, show your work. Companies seem to prefer to report on things that are about to start and that are finished, and are less comfortable reporting on what is progressing or regressing (where there’s usually some bad news involved). But it is what is incomplete and in process that defines whether a project or effort will be more or less successful in addressing risks.
- Fourth, avoid labels and fixed descriptions. ESG risks evolve and change constantly, and addressing them is a constant process. You may be handling them well in 2022 but that might change in 2023. The Comms and Marketing teams may not like a change from “We are a sustainable company” to “We addressed X risks in a mostly sustainable manner last year.” But you should make that change anyway.
- Fifth, be patient. Making changes, addressing complex risks, and working in difficult places is hard. Time is needed to listen and learn. There will be mistakes, unexpected positives, and new directions.
- Finally, engage with criticism. Companies expect NGOs and the media to do their homework and understand hard realities and decisions. Sometimes the media and NGOs don’t do that homework, or don’t do it well. It’s okay to call that out but to do so in a way that helps advance the conversation, not with an aim to shut it down or target those organizations. Ask if they are open to honest, off-the-record discussions about what you’re trying to do. Educate them about what you do and be sure to listen and learn from them. Like in any part of a business, relationships and trust matter.
None of the above is easy, but if you take some or all of it to heart, it can help your efforts both achieve what they are intended to substantively and deliver what you may hope for reputationally.