“Shareholder Capitalism and ESG: A Guide for Communications Leaders,” by the Arthur W. Page Society explores the factors to be weighed by companies, including the critical question of when to engage at all.
Three dimensions of ESG: In providing a broad overview of ESG for chief communications officers (CCOs), the report identifies three ways companies provide values to stakeholders:
- Selling products and services,
- Adopting ESG operations policies and programs, and
- Engaging in corporate social advocacy.
A new role: The report notes that companies have traditionally only advocated for laws and regulations affecting their business operations (taxes, trade, employment, etc.). “Today, however, organizations increasingly find themselves urged by stakeholders, including, most notably, their own employees, to take stands on some issues that previously would have been deemed out of their wheelhouse.” The report provides examples of companies who have successfully navigated this role (including HR Policy members Levi Strauss and Aetna) as well as those that have experienced harsh political repercussions.
Key considerations: The report outlines the key considerations for a company, mirroring what we have heard from our member company CHROs with experience in this area. Perhaps most important is deciding when to engage: “Rather than reacting spontaneously to stakeholder pressure as issues arise, it makes more sense for the organization to establish a way of thinking about and a set of standards for whether and when it might take a stand. Organizations should consider what are the public policy or social issues that they care most about based on their own missions, purposes and values; they also should consider where they are likely to have a positive impact.”
Outlook: Unfortunately, many politicians are unaware of the broad landscape encompassed by shareholder capitalism and ESG and assume that social advocacy on partisan issues is its exclusive domain. In addition to effective communications on advocacy, companies should also seek to educate policymakers on the broader playing field. This includes corporate actions that may mitigate or eliminate the pressure for new laws and regulations. The Page Society report is one of several excellent sources (many cited in the report) to help with that effort. See also our earlier report, ESG and the Role of the CHRO.
