INSIGHT(Actually) Do the Right Thing.
ESG is a critical brand component that no company can afford to ignore.
Mitt Romney, during his presidential run in the summer off 2011 at an Iowan state fair, noting that “corporations are people” was proof for many that the corporate American ego was woefully out of touch with Americans. We recoiled at his postulation, present company included.
I never thought I’d start writing, “Mitt Romney…” in a sentence that wasn’t entirely pejorative. These are strange times.
What if he is more right than wrong? What if this concept of corporate personhood* aids the existence of a framework from which companies can better recognize their own integrity, and we (the royal we including customers, stakeholders, neighbors, vendors, and partners) can demand they maintain that integrity? Spin city, but bear with me.
At its best, ESG (Environmental, Social, and Governance criteria) is meant to do just that.
A brand is afforded the opportunity to be a citizen, a member of a community, rather than the shell in which one might exist or an adjacent entity that merely services a community. Self-care is critical to well-being, and demanding integrity and accountability requires self-honesty first before it can be promised to the world.
To be clear, I am not suggesting that corporations have led the way. It is critical to note that ESG is an evolutionary response to both bad behavior and the demands of a more conscious and critical environment. As with evolutionary processes in general, there exists a lot more failure than success—and this process has just begun. Let’s not fall into a dream state where we believe we’ve done the right thing by checking the ESG box. While we’re asleep, the world will continue to grow, and our approaches to ESG will become outmoded, outdated, and wrong.
If you aren’t easily convinced—or are willing to toss integrity out at the first sign of a balance sheet—consider that people a lot smarter than I am consider ESG’s impact on the bottom line to be significant.
Every company—from hot dog seller to hot dog maker—needs to consider, practice, and continually evolve its ESG approach. It isn’t the do-good sauce on top. It needs to be baked in throughout everything a company does.
But how? Emerging from the dark forest is never easy, and there isn’t a clear trail of breadcrumbs. Greenwashing is nothing new. Neither is subjectivity and fitting data around opinion in place of certainty. “Best practices” will only get you so far. We (again, royal we) have not defined, nor have we codified, what the “criteria” are for ESG.
That’s probably a good thing.
It is critical for each organization to look at ESG at the brand level and through their own environment. Just as organisms evolve in response to their stimuli (fish make absolutely horrible mountain climbers) so too should ESG. There are some critical commonalities (e.g., acknowledgment, diversity, inclusivity) and others that matter perhaps less, depending on the context. I’m less worried about Facebook’s (sorry, “Meta”) commitment to solar (E) than I am about other aspects of their business (S, G).
Whatever Heinz does with the metric tonnage of goo that is left over after the ketchup is baked (oiled? extruded? squeezed? Guessing here…) has a bigger impact on an individual company level than the gas burned by a local vendor to keep those dirty water dogs edible microbe-free. But Environment (capital E intentional) does factor for both.
Each company will require its own thinking, approach, and application. Each company will need to define, for itself, ESG expectations for its customers, stakeholders, and employees. This is an integral initiative for any company to undertake and maintain.
Integrity does not emerge. It is planned, built, managed, and fostered at the brand level. Brand is the only aspect of any organization that is directly connected to everything it does.
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Matthew Thornton
25 April, 2022
*While not germane to this writing, it is critical to note, if for no other reason than my own integrity, that “corporate personhood” is not a well-baked concept. It has created seriously awful off-gassing effects such as the Citizens United v. FEC Supreme Court decision.