Why should technology businesses care about ESG? Why are companies discussing ESG in their boardrooms? How does it affect marketing and PR? First, what is ESG? ESG is short for a company’s environmental, social and governmental responsibilities. This may sound dry, but these are red hot topics for businesses to discuss in 2022.
Things were already going this way in recent years. Companies had realised that to be successful on social media they need to be likeable. Now ESG is becoming mandatory because the authorities in many countries require companies to report on their environmental impacts.
Why ESG for technology businesses?
ESG is a particularly high priority in the technology sector and an important differentiator for IT service businesses. This is partly because larger quoted companies in the US, UK, EU, China and Australia are now obliged to provide ESG reports as well as financial ones. However it is not just their investors who care, it is their customers as well. If a business sells to government or public sector organisations, ESG questions will feature in tender documents. This means that ESG is mandatory to win certain contracts. It also means that businesses should address ESG and make it part of their brand.
ESG goes deeper than PR
We all want to play our part in reducing carbon emissions and making the workplace a fairer, safer place for everyone. In some companies, it may be the Public Relations team that is pressing for modernisation and improvements, but it goes further than just PR. Companies that use ESG goals as “good PR” may just be “greenwashing”. Words alone are not enough. People and markets want to see real action on sustainability and modernisation, and companies’ policies and progress need to be communicated to the outside world.
These are subjects that people care deeply about. Many people feel there is not much time left to act on climate change and they want to see action. The realities of poor governance tend to stick in the mind for a long time. Who will forget the lack of toilet breaks for Amazon workers, the vastly overpaid chief executives in loss-making businesses, the off-shore manufacturing businesses utilising child labour?
Governance is not a dry area
Governance sounds dry, but it covers exactly these issues, the ones that people care so much about. Fortunately, businesses are beginning to act. They are taking action to reduce carbon emissions. Some companies are introducing cycling policies. Many businesses are looking for ways to prevent pollution and recycle waste in a good way.
What decisions has your company made about energy? What about solar panels or even beehives on the roof?
Are you good citizens? is your business doing its part to help the less well-off members in the industry or the local community?
Does your board have a blend of directors from different backgrounds and real diversity? People are very interested to know. They want to be sure that your that the CEO doesn’t earn 100 times as much as the frontline employees and youngest workers.
Companies are finally taking the issues seriously and asking these questions. Personally, I think it’s exciting to see companies beginning to change in this way, and it will make a difference. Technology businesses, in particular, should embrace such changes and communicate them through their PR stories and blog posts.
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