Environmental, Social & Governance Briefs

Summer is upon us. Unfortunately, so is disaster season. Last year was unprecedented, with eight major disasters occurring within just a few short months of one another. Forecasters estimate hurricane activity to be higher than normal this year for the United States, and crises such as floods and volcanic eruptions have already devastated communities in Guatemala and Hawaii. Companies need to get strategic now to prepare for the next disaster.

Is a recession on the horizon in the UK? The short answer to this question is: yes. The probability of a recession in the near term has risen substantially. The UK business cycle is maturing and the lack of certainty around Brexit makes it difficult for consumers and businesses to make plans about the future. These are the ingredients that recessions are made of. The long answer requires an in-depth (and wonkish) analysis of The Conference Board Leading Economic Index for the UK.

Whether it’s the 24-hour news cycle, social media, annual reports, internal messages, or stakeholder requests, the need for clear, understandable, and relatable corporate social responsibility (CSR) information from companies is increasing. Some stakeholders want metrics, others want stories. Either way, timeliness and transparency are key. So, which data and disclosures are relevant and/or required?

China’s new Environmental Protection Tax Law (EPT Law) came into effect on January 1. It replaces the old Pollutant Discharge Fees System. Taxation could increase, as more headroom for localities allows to set higher tax rates. Some leveling of the playing field is possible, as non-compliance and tax evasion are addressed. Supply chain costs may be impacted.

Larry Fink, CEO of BlackRock, started the year with a provocative challenge to the CEOs of the world’s biggest and most influential companies: What’s your purpose? As Fink framed it in his open letter, companies need to have a compelling long-term vision for how their business will sustainably benefit all of its stakeholders, including shareholders, employees, customers, and the community.

Increasing recognition of the impact of environmental, social and governance (ESG) risks and opportunities on portfolio value is driving institutional investors engagement with companies on ESG.

Brands of all sizes and in all industries are increasingly being impacted by America’s divisive political, social and cultural storms. This new reality makes the roles of communications leaders like CCOs and CMOs as strategic decision makers, planners and guardians of a brand’s goodwill more vital—and more challenging—than ever before.