Which makes it slightly strange to be quoting hip hop legends Public Enemy in an ESG column. But few assessments would better sum up the state of the greenwashing issue at the moment than “Don’t believe the hype”.

Like any cynical communicator, I’m mindful that much is done to make reputations as glossy as possible, and despite the universal understanding that behaviour is what does most to shape it, words that make it seem as positive as possible will always be swirling around.

As we approach events in Glasgow though, and with calls growing not just for standardisation in ESG reporting but also regulation to counter greenwashing, the need to address it seems to be coming to the fore.

Doing so will of course require some definition – an untruth is an untruth, but how far can a business go in varnishing (with paint, in this case) its credentials so that the truth is stretched beyond acceptable bounds?

In other words, how much hype is too much, so that it tips over beyond embellishment,  either into claims that can’t be substantiated or, worse, misrepresentation?

All of this is likely to be subject to much more scrutiny in coming months, but the recent calling out of greenwashing may place a lens of sorts over some of the commitments and comments made at COP26. While much of the recent media attention has focused on ESG investing and the need to clamp down on claims that overstate ‘green’ progress or credentials, the point that hasn’t been made yet – but will surely come – is that hyping green matters should be treated differently to hyping, say, a product’s other benefits of performance.

That doesn’t mean presenting facts with no emotion or context, but does likely mean information must be fair, accurate and balanced, with greater definition around how those factors are applied. In fact, the very word ‘green’ may end up slightly meaningless and ‘twee’, with the focus shifting to environmental science and measurable, definitive progress to reduce carbon emissions rather than colour-based generalisations.

But if not, green hype may become a clear and heightened reputation risk.

Again though, what is greenwashing? Predictably, definitions vary – it’s a subjective topic. But until it set in regulatory or standards-based stone, despite the Government’s forthcoming roadmap, expect the noise around greenwashing to continue.

Over time, there will likely be reduced risk of companies around ‘washing’ as definitions firm up and clearer lines are drawn. But until then, expect what green really means to come into question frequently, and hype to be a tool used very carefully.

The post What does ‘green’ really mean? first appeared on ESG Foundation.

The post What does ‘green’ really mean? appeared first on ESG Foundation.

At a time when nations around the world are relying on data to unmask the facts about how we emerge from the grip of a pandemic, the whole truth has rarely been at such a premium.

But if you look at the media reports around ESG investing and big business commitments to sustainable change over past weeks, you could be forgiven for thinking that the whole truth was still out of reach.

That’s because defining what ESG is, agreeing a frame of reference for business performance against it, and then taking an evidence-based approach to tracking and demonstrating progress over time is still open to interpretation. Even the word ‘sustainable’ can be taken many ways.

The result has been that there is no single version of the truth around ESG, despite a fairly common consensus that achieving one will better hold businesses to account, and support fair and transparent reporting on achievements.

From a reputation management perspective, this poses several challenges. Firstly, not having standardisation creates unwelcome wiggle room that can deflect from the reputational gains that can be made from demonstratable progress against ESG goals.

Secondly, coming up with incisive strategy for pursuing an ESG change agenda and getting stakeholders on board with it is harder when different data sets present different insights. 

And thirdly, being able to identify what matters most to a business is tricky – or more importantly, subjective – if analytical approaches aren’t rooted in standard definitions. If they’re not, the understanding of reputation risks and strengths related to ESG factors will lack objectivity. 

Things are changing, and standard definitions are beginning to take hold. SASB – the Sustainability Accounting Standards Board – is now probably the most comprehensive and widely-accepted. With definitive ESG frameworks in place, we can begin to really get to grips with where a business’s many different stakeholders, not least investors, really stand on the many different ESG issues, and even probe why that’s the case. 

This ‘multiple versions of the truth’ challenge has given rise to multiple approaches to assessing ESG-related risks and opportunities too. Whereas some analysis relies on market research, for example mass polling, to gauge opinion and cross-index that with ESG factors, others take a more objective view by scanning everything in the public domain. The advantage of the latter approach is that insights can be interrogated to understand how that picture has changed over time, rather than relying on the more cyclical, ring-fenced and ultimately subjective data from surveys. 

What does this all mean for a business trying to get a clear and unequivocal view of the ESG factors that matter most to them, and how to approach them strategically? For now, it means sifting through the multiple versions of the truth available to find the most objective one for them, based on the most standard definitions. In time, the more standardised definitions become, the more straightforward – and unequivocal – it will be to prove impact. 

The truth will be out there, but for now we’re often dealing with truths.

The post The truths are out there first appeared on ESG Foundation.

The post The truths are out there appeared first on ESG Foundation.