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Media Profile is part of the Public Relations Global Network (PRGN), a community of 50 hand-selected public relations firms from around the world. We’ve had the pleasure of connecting face-to-face with many of its talented members at our bi-annual PRGN conferences back when we were able to travel, and it’s fascinating to learn where agencies are focusing their efforts today.

One topic gaining momentum across the globe is Environmental, Social and Governance (ESG), and how PR agencies are counselling their clients in this space. cometis AG is a leading Investor Relations agency in Germany with a dedicated ESG practice. We recently invited Michael Diegelmann and Regina Seibel of cometis to share their ESG insights. Here’s what they had to say. 

The Norwegian Sovereign Wealth Fund led the way. The gargantuan fund, which holds an average of 1.4 percent of every listed company, added 15 “dirty” commodity companies to its blacklist last year (four of which are Canadian). The practices of each were identified as particularly harmful to the environment. For ethical and sustainability reasons, it announced that it couldn’t justify continued investment in such companies. Not only that, but the financial risk was simply too high.

This isn’t an isolated case. Today, the ball is in the court of every company.

We’re not exaggerating when we say that all Canadian corporations should put Environmental, Social and Governance (ESG) issues on their priority lists as soon as possible. Public or private, big or small — it doesn’t matter. Public companies are being compelled by new regulations and pressure from asset managers to be more sustainable, in some instances monitoring their entire supply chain to confirm there are no human rights abuses within it. Private companies are being asked by their clients to prove, through transparent data, that they’re complying with ESG measures and applicable guidelines so they don’t lose their contracts. These priorities are cropping up everywhere.

Up to now, asset managers have relied on the recommendations of ESG rating agencies for their investment decisions. However, the ratings are very much a work in progress. This is because they are often based on companies’ self-assessments or from data collected by algorithms on a company’s website. Although this information is publicly available, it can easily be changed. Not only that, different ESG rating agencies have different criteria and focus areas. The ratings are not always comparable: companies can sometimes perform very well with one rating and very poorly in another.

Current ESG reporting is disappointing

The most valuable tool for all companies is therefore a well-structured and transparent ESG report to show the actual measures and progress made in the area of sustainability. The most important thing here is to provide financially relevant information, such as the criteria identified by the Sustainability Accounting Standards Board (SASB), for each industry (SASB is an independent nonprofit organization that sets standards to guide the disclosure of financially material sustainability information by companies to their investors). However, as research from the Global ESG Monitor (GEM) led by cometis and market research institute Kohorten, along with PRGN partners Currie Communications (Australia) and Xenophon Strategies (Washington DC) showed, not every organization’s reporting is up to snuff. The reports of listed companies on DAX, EUROSTOXX, ASX 50 and Dow Jones include gaps, lack transparency and are superficial as they lack depth. Only 29 per cent of companies report financially relevant SASB information. The Dow Jones companies perform particularly poorly, with six of the worst 10 ESG reports.

Binding, internationally applicable guidelines on what sustainability reporting should look like do not yet exist. But they’re coming. In the EU, initial guidelines are already in place. It’s no coincidence that companies from the DAX and EUROSTOXX perform better in GEM than their American and Australian counterparts, but there is room for improvement worldwide. As a first step, it’s a good idea to look at the structure of an ESG report and start collecting data as early as possible. After all, pretty soon every company will be obliged to do so anyway.

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ESG issues encompass globally pressing problems for which the solution is urgent. Every company should have an interest in helping to protect the environment, promote social equality and uphold human rights. Not only for financial reasons, but also to be considered a responsible company and to make a valuable contribution to the world.

PRGN members, including Media Profile, cometis, Currie, Xenophon and others, are counseling clients on how to get ahead of this trend. Like all good storytelling, it’s important to know what you want to communicate, who you need to reach and why you are doing it. If you’d like to learn a bit more, read about how to write a suitable ESG report and why it’s a good idea to start today:

Regina Seibel Headshot

Michael Diegelmann and Regina Seibel,
cometis AG

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