Giving Compass' Take:
- Eric Reicin, writing for Forbes, discusses the need for businesses that are engaging in ESG practices to be more communicative and transparent with investors.
- How does improving communication practices strengthen the ESG ecosystem?
- Here are five steps for boards to embrace ESGs for 2021.
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When Rachel Carson wrote her landmark book Silent Spring in 1962, she sparked the modern environmental movement. Her call for better corporate behavior when it comes to the environment took time to sink in, but there is no doubt that it stuck.
Indeed, corporate environmental policies have become so ingrained in business practices that the problem Carson identified has shifted. The question “Will corporations ever do anything to protect the environment?” has been answered.
Today, businesses’ strategies and tactics to prove they are good corporate citizens go beyond the environment to include social and governance practices. ESG has become the widely recognized moniker for these widespread efforts, with great attention paid by investors and to a lesser extent by regulators.
Publicly held companies have, in recent years, begun to standardize and improve their communications to investors about ESG. In doing so, they have been rewarded. The widely circulated Larry Fink message for the CEOs of the companies in which he invests spoke volumes, both in what it revealed about the “sustainability premium” that exists with investors today, and for what it predicted about how that premium will extend to other stakeholders, including consumers, in short order tomorrow.
Though consumers rely on businesses for information about their current corporate environmental efforts and their approaches to social and governance issues, ESG messaging is not something that consumers can easily confirm for themselves.
A widespread commitment to accountability in ESG messaging to consumers would be an outstanding complement to the work that is already being done in communicating ESG policies to investors.
Read the full article about accountability with ESG claims by Eric Reicin at Forbes.