Changing the World can be Good for BusinessWhile many organizations promote and publicize their ESG (Environmental, Social, & Governance) efforts, still there exist significant gaps between concepts and execution. This is especially true for the Social and Governance dimensions. Environmental initiatives are generally maturing. However, the Social aspect is receiving preliminary, and sometimes misguided, attention, and the Governance aspect is often no more than a few paragraphs in the annual report. Why is this so, and how can performance be improved? For Episode # 52 of my podcast, The World Class Leaders Show, I was honored to host Miriam González Durántez. Miriam is an international trade lawyer who currently leads the trade and EU regulation practice of US law firm, Cohen & Gresser, and is a founding partner of Altius. Her extensive legal experience includes advising clients on intricate EU regulatory, compliance and trade matters, and Miriam serves on several influential boards and advisory committees. Miriam is the Founder and Chair of Inspiring Girls International, a global charity dedicated to raising the aspirations of young girls around the world by connecting schoolgirls and women role models. The campaign operates in nearly 30 countries across the globe and has led the highly praised global campaign #ThisLittleGirlIsMe.
Environmental, Social, and GovernanceThe three aspects of ESG initiatives are integrally linked and are all equally important in delivering a positive impact on global and societal concerns. The Environmental dimension has received more intellectual support, and a higher level of media attention for a longer period of time. These circumstances have generated more activity and greater focus — even though some of the work done could be considered ‘greenwashing’. With respect to the Social dimension, companies are beginning to realize and accept their existence has an impact on society, and that whatever they do should take that impact into account. This activity must go beyond simple charity bequests and should involve financial analysis and goal-setting that deliver visible returns in order to be sustainable. The Governance dimension needs to support the change in organizational emphasis, bringing the initiatives into focus and ensuring close integration into an organization’s DNA and executive oversight.
Monetization of ESG InitiativesCan ESG efforts be monetized? This is presently easier to do on the Environmental axis, given the establishment of carbon goals and target objectives that are quantifiable and time-boxed. With the level of brain power that has been applied to date, combined with evolving emissions-tracking capabilities, we can see and forecast the potential for success. However, this is less so for the Social axis. What is needed is for acute financial services intellect to be dedicated to the work of establishing a strong financial framework and governance. Additionally, we would have a greater impact over the longer term, if we could provide guidance, examples, and education for other companies to benefit from. One outcome of this missing attention to the Social dimension has been the lack of a pipeline of ‘good’ project ideas for investment, Important elements would include:
- Multi-year investments
- Allocation of employee time and attention
- Long-term vision and monitoring of results.
A Common PitfallIt’s critical to recognize differences between potential issues, countries, and cultures. A common failing with companies and advisory entities is that they throw several different initiatives together at the same level. Initiatives may be developed to address concerns about gender, race, disability, LGBTQ+, etc. When issues affect minorities and the rights of minorities, a great deal of care is required to ensure that solutions presented to each affected group are unique to their specific situations and geographies.
Making a Global ImpactDiscussing the scale and success of the Inspiring Girls initiative, now in 29 countries (with more to come) and affecting thousands of girls, Miriam shared with us some of her hard-earned wisdom.
- The idea must be simple. If it’s too complex for people to grasp quickly and easily, you lose momentum quickly.
- The central admin layer should be kept small and nimble, avoiding slowdowns or missed targets due to bureaucracy. Focus on the impact on the target audience, and not on the bureaucracy that delivers it.
- “Franchise” the idea across multiple countries to increase leverage and accelerate adoption. Utilize volunteers heavily to maximize influence.
- Recognize and respect that different countries and cultures will do things differently. With a country-specific focus, it’s easier to ensure meaningful support that is carefully tailored for the audience.
- Meet your audience where they are. Inspiring Girls makes heavy use of mobile technology, Social Media platforms, and short-form video formats.