Choice Democratic Capitalism ESG

Frameworks Are Not Outcomes

By Taylor Gray, Ph.D. on September, 21 2021

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Taylor Gray, Ph.D.

The world is a better place when companies are good corporate citizens. I remain focused on developing meaningful and actionable insights from empirical data in pursuit of a better world.

As someone who works in the ESG and corporate sustainability space, my social media channels are full of posts by NGOs, industry associations, and third-party governance programs calling on companies to join and align with each and every newest agenda they have to offer.

There are many hundreds of industry-specific, national, regional, and global programs, coalitions, and frameworks dangling the promise of being able organize companies and push us all toward a more sustainable future. Some frameworks focus exclusively on key aspects of corporate impact, such as emissions and renewable energy standards, while others are more broad and inter-sectional touching also on aspects of diversity and inclusion, supply chain management, government relations and so on.

 

Looking for a Big Fish

This space is actually quite competitive as each distinct framework needs ever more companies to join as signatories in order to generate operating revenue, build social legitimacy, and mobilize critical interest. So it is natural that all these frameworks and coalitions have developed slick marketing strategies. 

In their own narratives--many of which have garnered significant public attention--they are the arbiters of what counts as ‘good’ corporate behavior, even though they can’t all agree even amongst themselves on what actually should be measured and how.

Are there even any benefits to a company if it is not a Certified B Corp? Does a business even care if it is not a member of the We Mean Business Coalition? Can you care about climate change if you haven't signed the Climate Pledge?

Some of these frameworks and coalitions are doing excellent work, yet their own business model forces them to focus increasingly on marketing and membership and less so on actual impact. It’s a numbers game. A non-profit framework/coalition needs to remain visible--and much more visible than others also operating in the same space--in order to draw in funding, grants, and donations. To do this, they need big name brands as signatories and a cutting marketing campaign to showcase the fact that they do have these brands as signatories.

This results in brands being inundated with calls to join each and every framework and coalition---which is simply impossible and counter-productive.

 

Being the Big Fish

So, to each and every company out there struggling with the decision as to which coalition to join, which framework to participate with, or which organization to contribute to, here are a few  thoughts from consumers:

 

              1. We care much more about your actual impacts and initiatives than we do about which coalitions you joined, which frameworks you employ, or which organizations you support. Knowing exactly where you source your renewable energy, for example, is more important to us than is your membership in some renewable energy coalition or another.

              2. Similarly, your track-record is so much more important than are your promises, statements, and policies. Again, we care about actual impacts.

              3. Third-party certifications mostly help us feel good about choices we already wanted to make. Very few of us change our behavior on account of the presence/absence of third-party certifications. It’s not that we don’t care, it’s that we don’t really trust many of these certification bodies any more.

              4. Coalitions and frameworks matter much less to us than these organizations want you to think. I work in this space and am familiar with a wide range of coalitions and frameworks, but the consumers we speak to are not. So many organizations promote their social media audience analytics as proof of social legitimacy, but such analytics don’t mean a thing in the real world.

 

Making Sense of It

So what does this all mean for companies? It means we want you to take significant and authentic action on your impacts on people and the planet, and we want you to show us these actions and report on their results with full transparency. We want to be able to make decisions for ourselves and we want access to the information we need to make these decisions. We don’t want proxies, we want verifiable outcomes.

Companies should participate in coalitions and frameworks and so on, but only because the ones they choose actually help them deliver what it is consumers and stakeholders want and not because they think such participation will somehow assuage the concerns of consumers and stakeholders. Coalitions, frameworks, third-party governance organizations have a role to play in moving us to a positive and sustainable business and society relationship, but they must be engaged as means to an end and not the end itself.

 


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