Your social value messages must be grounded in truth
Values and purpose in organisational culture have never been more important to both customers and your own employees than we see right now.
In 2019, Pamela Cone and I called on general counsel in companies worldwide to leverage the groundswell of support for “doing the right thing.” It’s too good an opportunity for corporate counsel to miss, we told them, as part of an article published in Corporate Counsel, an ALM publication (law.com).
This same opportunity could not be more important to professional services marketing professionals and their organisations today. You all know very well that your organisation’s brand is shaped not only by the services you produce and deliver, but by the principles and ethics on which your people and your firm stands.
A perception of good ethics and being a good ‘corporate citizen’ is important for every service business. Many market their good intentions well before they can provide tangible proof—a practice that has fuelled lots of scepticism. “Greenwashing” is a term that can also apply to the Social in ESG. Your stakeholders want to see that the stories you tell about your impressive social impact are backed by qualitative and quantitative proof.
While marketers must be involved in crafting and driving the messaging, the messages must be grounded in truth. For a service business, there is often a more meaningful story to tell on the Social front than the Environmental one, since service organisations tend to have very low carbon footprints.
Still, law firm Bennett Jones’ ESG Strategy and Solutions leader Radah Curpen describes the challenge well:
"ESG disclosure is not simply a marketing or reporting exercise. It is the transparent communication of your company's values, performance and goals regarding ESG issues. Be careful about overly aspirational goals and flashy targets without real roadmaps for achieving them."
Pro bono efforts are impressive, and even more so when broadened to social responsibility efforts that involve people in all disciplines in your organisation, whether a law firm, accountancy or consultancy. But that is not enough. Your objectives for Social must be woven into the fabric of the business, including in how it makes decisions, and how it recruits and compensates.
In sharing her perspective at one of our CLO roundtables, Andrea Wood, Chief Legal and Governance Officer at Canadian telecoms giant TELUS said: "The complexities of a growing, global business will be mirrored in its ESG program. To manage this, ESG should be ingrained within the business model and organisational culture – it should not reside within a single function, but all throughout the business. Sustainability goals should be embedded into the company’s strategic business plan.”
So how do you do that? You can find good ideas from those who have been doing this for a while—your larger corporate clients (and especially those headquartered in EMEA and the UK, where ESG regulation is most advanced). At the end of this article I’ve listed some excellent published qualitative and quantitative measures that can drive your organisation’s reporting, and provide the punch that make your client and employee communications credible.
But first, I’ll share what I’m hearing has been most effective to hundreds of the world’s largest buyers of legal services—general counsel and compliance executives. They are using these practices to help progress on social impact strategy and reporting.
“Many market their good intentions well before they can provide tangible proof—a practice that has fuelled lots of scepticism. Your stakeholders want to see that the stories you tell about your impressive social impact are backed by qualitative and quantitative proof.”
1. Trade ideas and experiences with others in your role, across companies and countries. Learn from your peers’ lessons as well as your own. PSMG is a great way to do this!
2. Take time to think about the aspects of Social Impact that are most important for your company and where your involvement is required. Select a few main sources of ESG information that focus on the Social. Review your knowledge base when you need guidance.
3. Be selective—don’t try to do everything. Set parameters around your Social Impact focus and communicate where you will be placing your emphasis.
4. Don’t be afraid to question or recommend new social and other ESG approaches in your company that may differ from current practice. Be creative as you learn more. At this point, little about ESG management is set in stone, except that the focus on it is here to stay.
5. Involve professionals at all levels of your organisation. They can develop knowledge on specific areas of social impact that interest them—from qualitative targets to metrics. Share this knowledge across the business.
In response to the confusion and fragmentation among companies about metrics to select for their ESG disclosures, the World Economic Forum’s International Business Council (WEF/IBC) – in collaboration with Deloitte, EY, KPMG and PwC – has defined a core set of “Stakeholder Capitalism Metrics” to align mainstream reporting and track contributions to the UN Sustainable Development Goals more consistently.
Below is (verbatim) a selection of WEF/IBC’s overview of metrics related specifically to SOCIAL. These provide a useful framework (or at least useful guidance) to organize your metrics for Social Impact reporting to show achievements and ongoing improvement, using both quantitative and qualitative measures.
World Economic Forum’s International Business Council (WEF/IBC):
Core Stakeholder Capitalism Metrics
Diversity and inclusion: percentage of employees per employee category, by age group, gender, and other indicators of diversity (e.g., ethnicity)
Pay equality: ratio of basic salary and remuneration of women to men, minor to major ethnic groups, and other relevant equality areas
Wage level: ratios of standard entry level wage by gender compared to local minimum wage
Wage level: ratio of the annual total compensation of the CEO to the median of the annual total compensation of all other employees
Rate of employment: total number and rate of new employee hires by age group, gender, other indicators of diversity and region
Rate of employment: total number and rate of employee turnover by age group, gender, other indicators of diversity and region
Labour incidents: explanation of the operations and suppliers considered to have significant risk for incidents of child labor, forced or compulsory labor
Health and safety: explanation of how the organisation facilitates workers’ access to non-occupational medical and healthcare services, and the scope of access provided
Training provided: average hours of training per person that the organisation’s employees have undertaken during the reporting period, by gender and employee category
Training provided: average training and development expenditure per full time employee
Purpose: the company’s stated purpose, or how a business proposes solutions to economic, environmental, and social issues. Corporate purpose should create value for all stakeholders, including shareholders
Ethics: a description of internal and external mechanisms for seeking advice about ethical and lawful behaviour and organisational integrity, and reporting concerns about unethical or unlawful behaviour and lack of organizational integrity
Total tax paid: including corporate income taxes, property taxes, non-creditable VAT and other sales taxes, employer-paid payroll taxes etc.