Companies around the globe are hurtling toward adoption of ESG (Environment, Society, Governance) policies that commit them to goals and practices that they have never had before, or maybe even never thought of before.
Pushed by management consulting firms such as McKinsey, which opened its own ESG practice in May, firms are committing to such lofty goals as net-zero emissions, diversity and inclusion in recruiting and labor practices, and social transformation on an unprecedented scale, plus squeaky-clean corporate governance.
If you are a CCO or a PR firm consultant asked to take on the task on ESG, it pays to do a LOT of research and a little reflection on the past.
In its literature, McKinsey says, “Just as ESG is an inextricable part of how you do business, its individual elements are themselves intertwined. For example, social criteria overlaps [sic] with environmental criteria and governance when companies seek to comply with environmental laws and broader concerns about sustainability. Our focus is mostly on environmental and social criteria, but, as every leader knows, governance can never be hermetically separate. Indeed, excelling in governance calls for mastering not just the letter of laws but also their spirit—such as getting in front of violations before they occur, or ensuring transparency and dialogue with regulators instead of formalistically submitting a report and letting the results speak for themselves.”
The overarching question, then, is this: Is your company prepared to do all these things? By when? What resources will be required, and who will be accountable for implementation? Will it be tied to compensation? Remember, compensation drives culture, and ESG represents an enormous cultural change for most organizations.
Next, cast your mind back to the Eighties and Nineties of the last century (that is if you weren’t still in high school). Remember Benetton, the high-end Italian manufacturer of colorful sweaters? Starting in 1982, their advertising campaigns under the rubric, “The United Colors of Benetton,” took on some of the most volatile and touchy social issues of the time: race relations, religious tolerance, AIDS and homosexuality in general.
Under the direction of photographer and Benetton creative director Oliviero Toscani, the company created some of the most powerful images ever used in advertising, and created talk (and blowback) around the world. Benetton was praised and honored for its stand on social issues, and vilified as well. People took to sticking their heads into Benetton stores and shouting, “We’re not shopping here!”
Today, Benetton is losing money and has been de-listed from the stock exchange. In 2017, founder Luciano Benetton, then 83, took over as chairman of the company. Many of its 5,000 stores have been shuttered, and its once-powerful voice and share of mind have been diminished to almost nothing. PETA launched a boycott against Benetton for buying wool taken from sheep that had been subjected to mulesing, the practice of shearing wool from their rear ends to prevent fly infestations. The worm had turned, and the winds of public opinion were no longer at Benetton’s back.
Of course, that was just an advertising campaign, and Benetton is not IBM or even Facebook—not by a long shot. But it pays to heed some of the lessons of PR history. In the long sweep of things, issues come and go, and favorable winds can shift from a benign breeze at your back to a gale in your face. Choose wisely, and don’t get involved with the fashionable or the flavor of the month, the way Ford has with its hortatory “Juneteenth” commercial. Henry Ford’s racist past is bound to rear its head.
Bill Huey is president of Strategic Communications and the author of Carbon Man (Kindle, 2010).