Corporate Affairs in the Era of ESG Challenges: In conversation with the UNFOLD board

Sustainability continues to be top of mind for businesses around the world, and Corporate Affairs (CA) professionals have a key role to play in ensuring that companies fulfil their commitments to people and planet. How exactly can they accomplish this goal? And how does the recent rise in backlash against ESG regulation fit into the picture? UNFOLD board members Sarah Campbell Donia (Global Chief Corporate Affairs Officer, Randstad), Steve Heywood (Head of External Relations, Philips) and Simon Henzell-Thomas (he/his) (Global Director of Climate & Nature, IKEA) share their thoughts.

What’s the role of the CA function in shaping a company’s sustainability journey? Is it mainly about holding the organisation accountable to its commitments, or is there room for advocacy?

Sarah: The word that comes to mind is ‘convening’. The role of the CA function is to convene thoughtful discussions that help build consensus about what a company should and should not do. It's less about holding the organisation accountable and more about steering the strategic direction. And to do this effectively, it’s really important to build credibility by keeping yourself up to date and keeping your skills fresh – and not just in communications. After all, in order to have meaningful discussions with finance or sustainability teams, CA professionals need to understand integrated reporting – the pressures, the guidelines, the history of CSRD and ESG regulation, and so on.

Steven: I recently studied with Professor Benoit Leleux and Jan van der Kaaij at the IMD. They look at sustainability leadership through the lens of Vectoring – the effective design and implementation of a stronger sense of direction fused with moving sustainability programs forward with speed. I think that effective communications counsel within a wider CA function should contribute to both elements, but particularly direction. We are typically not executing these programs, but we should be providing insights into what stakeholders and society expects and where we need to be in order to be ahead of expectations. Whether you have a formal role in sustainability or not, it's part of the wider remit of the function as it is one of the key ways in which trust is gained or lost today.?

What are your thoughts on the ESG backlash? How can CA professionals cut through all the noise?

Simon: I think the backlash will burn out because the legal basis for many of the challenges to ESG regulation is very weak. My view is that ESG can be a powerful driver of growth and impact for every business – if we approach it in the right way. It’s legitimate to ask how much time it is wise to spend on reporting versus actually making an impact, but the way to answer that question once and for all is to set up your process in a way that adds value and gets to the core of what you do as a company. It’s important for CA professionals not to get lost in the noise. One way is to ensure that we have Board level engagement in the ESG process and everyone across the company is engaged – it shouldn’t sit on the outside, but live in the core of the governance set up.??

Steven: ESG is still as important as ever, and not many folks are asking companies to ditch good practices. That said, some companies have been too quick to greenwash their actions. That’s part of the reason why I’ve been exploring sustainability more closely, so that I can push back where necessary. What are the true materialities of company X, Y or Z, for instance? What are they taking from the planet, and how are they mitigating that? We hear lots of talk about small milestones, but there needs to be a full conversation – internally and externally – about sustainability’s place within corporate strategy and direction. And that’s where we come in as CA professionals. We can’t be tempted to drink the Kool-Aid: credibility is key.

Sarah: Echoing Simon and Steven: yes, as CA professionals, we need to foster good conversations between employees and employers, and among colleagues. But I'm also hearing from experts in the US that it’s increasingly important to help colleagues understand when not to convene, and even when to politely leave a discussion. Unfortunately, there’s no easy way to navigate through today’s polarised environments.

Simon, you raise an important point about sustainability reporting. Do you think it’s an unnecessary distraction, or an opportunity to build trust with stakeholders?

Simon: I don’t think it’s a question of whether or not to report, but a question of how. If you don’t dig deep into your company’s sustainability impact and performance, reporting can quickly become a box-ticking exercise – and that can add up to a lot of work with minimal results. Instead, reporting needs to sit at the heart of a solid strategy and come with robust KPIs that are embedded across the organisation. We need to be open about our succusses but also the challenges we face, so that others can learn. Doing reporting right is all about building trust and driving performance.

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Do you agree? Get involved in the conversation in the comments below – or reach out to learn more about UNFOLD and our work to maximise the potential of purposeful business!