When companies lack coherence between what they say and what they do, or when they define themselves through marketing actions that they neither feel nor think, sooner or later the truth will come out.
Today, more than ever, it is more important to be and to seem, and to achieve this, it is not enough to be willing or to raise the fashionable flags. It is necessary to be very clear about the values and purpose of the company, especially because we are living in a changing and uncertain scenario, where the keynote will be to adapt, but with conviction and not by the slogan, through an aligned and collaborative work.
The ESG criteria (environment, social, and governance) are a very good first start for companies to adapt to the changes, but to maintain the essence of these, it will be necessary to be very clear about their letter G, that is, their Corporate Governance, because if they are not clear about their purpose, why they exist and what their value is, they will wander in the search for momentary solutions, which can lead not only to a loss of focus and short-term objectives but also to bad practices to achieve them, which will eventually lead to the death of the company.
When we talk about sustainability, the first thing we think of is “green”, orienting tactics towards the environment, carbon footprint, climate change, etc., which is fine. The problem comes when those strategies are not aligned with the company’s purpose because most likely it will not take them anywhere.
These days, HSBC bank is lamenting the intervention of one of its executives at a Financial Times conference, who, in a presentation entitled “Why investors should not worry about climate risk”, criticized the financial industry for showing too much concern about climate change, lowering the profile of “apocalyptic” announcements, he said, about its effects on the world. And although the bank suspended the executive and is conducting an internal investigation, his comments – as a representative of HSBC – directly affect the company, even though it effectively rejects what its official said. In fact, according to the Financial Times, both the title of the conference and the messages were agreed with the bank weeks ago. Therefore, there are doubts about the bank’s real conviction on the matter.
G is the least popular of the ESG letters and the most important. It is the backbone of the business and, if we are not clear about it, if we do not have good governance, we will simply not be sustainable, nor consistent with our actions, nor will we be able to anticipate risks, let alone successfully overcome them, even if we had E and S very well implemented. We must understand that by being clear about our governance, we will be able to respond to the needs of the future and not just those of the moment.
To move forward along these lines, it is necessary to listen, look beyond the business, analyze present and future risks, including those of the environment, as well as the challenges of the world, including the consequences of war, digitalization, care for the environment, data protection, ensuring good practices and transparency, among others. Companies must be able to review how they will be sustainable in their new “being”.
It is also important to consider that sustainability is not only for large companies, and that the excuses that it will take more time and resources (human and economic) are not valid if we think that a business model that is raised from the beginning with a vision of the future and a clear G, rather will have savings.
When we talk about the role of the company in society, it is to understand itself in the ecosystem in which it operates, where it is not an island, but part of a chain where its decisions can affect or benefit the environment, and that thinking about changes in a disruptive way and embracing innovations, instead of fearing them, can help to be more efficient and sustainable.
I invite you to join the G movement, to be aware as a company that if we do not start with G, everything we do will not be sustainable over time. It is the only way to be consistent between what we say and what we do, understanding that this will be the yardstick by which we will be measured. For the same reason, the “ESG” should become GSE!