Thursday, September 26, 2019

ESG Reporting Trends and New Frameworks through the Eyes of an Expert: A Conversation with Wesley Gee

Wesley Ge
I had a chance earlier this month to chat with Wesley Gee, who leads sustainability advisory services at Toronto-based The Works Design Communications and supports corporate/sustainability reporting for clients in sectors including energy, mining, financial services, consumer goods and retail. Wesley also contributed to the development of the GRI and SASB standards and is a judge for CPA Canada’s Corporate Reporting Awards.  

In our conversation, Wesley shares his perspective on sustainability and integrated reporting after more than 15 years helping companies identify and present their purpose, priorities and performance.

MK: How do you counsel clients on integrating new reporting frameworks – such as the TCFD and SDGs – into their reporting, particularly if they already align with the GRI?

WG: We’re excited to see such a range of frameworks and standards. Contrary to common belief, I think they’re actually improving consistency and quality –- from climate risk and financial disclosures (e.g., SASB, TCFD) to sustainability and purpose-driven reporting (e.g., SDGs, GRI). The GRI isn’t the only act in town, so it isn’t always easy to choose the perfect mix of frameworks, especially when companies have different needs to meet.

When advising clients, we first try to understand -- and anticipate -- their stakeholders’ wants and needs, and then discuss what they should really be trying to achieve in terms of their strategy, governance, metrics and communications, including reporting.

We often help companies assess their priorities beyond what may be considered financially material. Doing so can offer a great opportunity to scan the field, and a company’s risk registry, and gain both objective measures and expert insights from its stakeholders that can strengthen the company’s strategy – and improve how it contextualizes important issues, by showing both sides of the story.

There is no one-size-fits-all approach because most analysts still don’t really know what they want, so we recommend that companies report on a combination of two or three frameworks. But when sharing the data, don’t forget the story. Context matters.

MK: What issues do the report issuers you are working with struggle with the most? What are their greatest concerns?

WG: Because of a lack of consolidation across frameworks (and a somewhat agnostic attitude from the Street), companies functioning with one or two practitioners need to make tough choices. Do you continue to complete a 130-page CDP survey or just address the TCFD recommendations? Do you continue following the GRI Standards or streamline your process to report only to the SASB Standards? Many of us know that these frameworks were all developed with unique and valid purposes (e.g., the SASB for financial reporting and the GRI for sustainability reporting), but internal teams often don’t have the time – or inclination – to address all of them.

Additionally, companies are really trying to gain trust and support from their stakeholders and are struggling to find the right mix of tactics to inform, engage and inspire them. While PDF reports and data tables are a necessity, more companies are investing in mainstream marketing, digital campaigns and communications strategies. These efforts are strengthening their presence as purpose-driven brands, and encouraging interaction through open innovation, online forums, engaging videos and gamification. We’re bringing sustainability to the masses.

Lastly, in an age when the stakeholder is the new shareholder, many companies are having an identity crisis. The other day, I read one company’s vision: to become a mid-tier gold producer. And it was nothing short of depressing. How can an employee, a community member or shareholder buy into that? On the other hand, I see “purpose” being used superficially, sometimes inflating a company’s role in, or perceived benefit to, society. The SDGs seem to be helping companies connect to something bigger than themselves and are inspiring a level of introspection that is helping some companies to genuinely consider, and later share, their purpose.

MK: What are one or two things that you wish all reporting organizations would stop doing? Do more of?

WG: I won’t make any friends by saying this but stop complaining and stop trying to keep up with the Joneses. There’s a hell of a lot of work that needs to be done at all organizations to get them into a space where they are fit for the future.

The present is the past, so you can gain perspective by continuing to engage with those who you trust (which, in our emerging space, may include those who you have not yet met, based in other parts of the world), who can help you to understand the broader landscape, challenge hypotheses and refine your strategic plan – including your reporting choices.

When you think you’ve figured it all out, you’ve lost perspective.

MK: Are you seeing, through reports, greater evidence that companies are integrating CR/ESG into their business strategies – through risk management, new products and services that address environmental/social challenges, etc.?

WG: More companies are developing integrated reports that, in many cases, include details on how they create value. They highlight the focus areas where they aim to make wider social impacts, and the outcomes of investments in people, assets, relationships and other capitals.

Since it can take companies up to two or three years of internal alignment to develop their first integrated report, it’s fair to assume that many of them are adapting their strategy to embed a wider range of environmental, social and governance factors into their financial disclosures.

But many companies are still at “stage one” (i.e., admitting there is a problem). After doing this, they still often need to set meaningful long-term targets in a way that will inspire ideas and actions from a critical mass of ambitious and talented people. This is what is required to deliver the change that is needed for a restorative future. So, we have a long way to go before we can feel good about ourselves.

MK: What shifts have you witnessed in CR reporting over the past five years, including any geographical or sector differences?

WG: I’ve been involved in reporting for about 15 years. During this time, I’ve seen shifts from storytelling-heavy documents to data-only reports that lack context. More recently, I’ve noticed that a lot of reporting has started to offer smart functionality enabling companies to develop a better experience for multiple users at once.

Today we’re seeing (and supporting) a reporting approach that is more intentional. We’re working in a more coordinated way with corporate communications, investor relations, human resources and sustainability leads (and their partners) to plan and deliver a complete solution. We believe that good reporting acknowledges expectations and executes on a plan that is far more customized. The formats we choose, those who we engage with (and how) and the analytics we assemble enable us to be nimbler and more objective. It helps us all have a little more fun to thoughtfully and objectively adapt to this changing space.

MK: What are your predictions for the future of ESG reporting?

WG: It’s easier than ever to engage with different audiences and gather useful information that helps us measure and improve our clients’ reporting and communications. Over time, we can iteratively improve how a company plans, segments and integrates its sustainability communications and reporting, so that it can be more intentional. Some users will be delighted to view spreadsheets that are aligned with specific frameworks (and they’ll know what to do with them). Others will want to explore and experience aspects of a company’s value chain and actively contribute with disruptive, innovative practices.

Stay tuned for a new research report from Works Design Communications next month. For more on CR reporting, read my recent article in Triple Pundit: Experts Offer Guidance on Reporting Frameworks to Ease Reporting Pain.

Thursday, September 19, 2019

Driving the Shift from CSR to Purpose – Even through a Financial Meltdown

Phil  Haid, CEO, PUBLIC Inc.
It was not easy to talk about Profit with Purpose when Phil Haid started Toronto-based purpose and communications firm PUBLIC Inc. in 2008. It was the height of the financial meltdown in fact. But his belief that business must be and can be a major catalyst for social impact was so strong he persevered.
Since 2008, PUBLIC has been working to show that integrating business benefit and community benefit is mutually reinforcing and scalable when community benefit becomes an explicit goal of the enterprise and society needs and challenges are factored into mainstream business decisions.
Phil says that in the past few years, the market has started to respond to this idea. And, in the past 12 months, the shift has been palpable.
Below, I share excerpts from a recent conversation I had with Phil about this growing shift from traditional corporate social responsibility (CSR) to Profit with Purpose.
MK: When did you first come to believe in Profit with Purpose, and what led you to this deep belief that you have built PUBLIC around?
PH: In 2000, when we were doing CSR communications strategies for companies, I saw that clients were always limited and ring fenced in terms of the time, attention and budget they received. They tended to sit aside and be divorced from their organization’s core business. To me, this didn’t make sense. I wanted to see more impact, but we were always limited and knew the approach we had built at client after client was never going to scale if it didn’t somehow become part of how these companies did business. At the time, there weren’t many examples of companies doing this, and this is what led me to create PUBLIC – to prove this thesis [that you could tie CSR to the core business] at scale.
MK: And has it worked?
PH: I think so. The change in the past five years has been remarkable. Five years ago, when we were talking about this [integrated purpose], we got glazed looks, disbelief and comments such as ‘it’s a nice to do, not a need to do.’ Every conversation was really  hard. People were still caught in the charity model. But today, you see the shift [from CSR to integrated purpose] happening.
MK: How do you encourage a shift within organizations from charitable donations to integrating purpose into their strategic, revenue-generating side of the business?
PH: I wish I could tell you I had a brilliant argument that swayed them. But, it’s really hard to make an argument to someone that purpose can help acquire customers, sell products, attract top talent when that person or organization is not open to moving in that direction. If they aren’t open to the idea– then they aren’t really the right fit for us. Instead of pushing our agenda too hard, we work to find a more practical way by designing a strategy or a campaign that moves the needle in the right direction. For example, we worked for a food company in Canada and started with a platform around how the company could address food insecurity. Over time, we were able to link this more closely to their core business and products. It’s hard for companies to make big shifts in their approach all at once; sometimes it has to be incremental. Companies have to move at their own pace.
MK: You believe that community benefits must become an explicit goal of the enterprise and that society needs and challenges must be factored into mainstream business decisions.  Can you share examples of companies that are doing this? 
PH: As it relates to sustainability, there are several examples, such as Unilever, where it has integrated purpose into some of their brands completely -- from how they create the product, to its supply chain, to how they market it. Marks & Spencer’s Plan A is another example. In Ontario, we are working with the Liquor Control Board helping them to look at their procurement process. They have put in place a whole social and environmental criteria of what suppliers need to do to be listed in their stores, similar to Walmart’s greening plan. They are pushing suppliers, for example, to move to lighter-weight bottles and to look at the human component of lifting and employee safety in warehouses. Tiffany in the U.S., another client, has introduced a diamond traceability initiative, which provides provenance information for every newly sourced, individually registered diamond it sets—a significant step for diamond transparency. And, San Francisco-based apparel label Everlane has built its whole business around the notion of radical transparency. It reveals the costs behind all of its products—from materials to labor to transportation. We’re seeing more and more examples, especially in start-up companies, where purpose is built into the business.
MK: How are consumers and other groups pushing companies toward Purpose?
PH: Consumers are making it clear they have a preference and expectation that companies and brands do the right type of things – they want to know, for example, how they produce their products, not just what they do in the community.  Customers are pushing for this and businesses are responding. Boards of directors are also starting to ask questions about social and environmental impacts, and employees are also a big force, as we saw in the recent Wayfair incident with walk outs and employee protests over sale of furniture to border detention facilities. Employees want to feel good about the company they work for. All of this is putting positive pressure  on companies to change inside and outside. There are also millennials and gen Z’ers who just ask why wouldn’t you create a company that does both – that makes money and creates value? This will help drive toward a purpose economy. 
MK: Looking into your crystal ball, what will successful businesses look like in 2030?
PH: I think we will  see in next 10 years an acceleration where social purpose and sustainability and shared value will be just how businesses operate. It will become ubiquitous. Brands and businesses that resist will perish. We will also see companies and leaders of companies becoming a much more forceful player in the global system. Business will change the world through its influence and its reach on issues such as the climate crisis and refuges. We’re already starting to see this.

Thursday, September 12, 2019

Talking to a Legend on the Future of Purpose: Carol Cone

Earlier this month, I had the pleasure to speak with the one and only Carol Cone, who is internationally recognized for her work in purpose and Corporate Social Responsibility (CSR). For more than 25 years, she’s helped build lasting partnerships between companies, brands and social issues for deep business and societal impact.

From 1980 – 2010, Carol was the Founder, CEO and Chairman of Cone, Inc.,  recognized as the nation’s leading cause branding consultancy. She went on to  lead the Business + Social Purpose practice for Edelman for another five years. Her most recent venture is Carol Cone ON PURPOSE, a “next generation purpose consultancy that educates, inspires and accelerates purpose strategy, creative programming and comprehensive impacts for companies, brands, nonprofits and individuals around the globe.” 

Want to learn more from Carol on purpose? Download Carol’s Purpose 360 podcast, described as a masterclass unlocking the potential of social purpose to ignite business and social impact. It’s really great and I highly recommend it. You can also sign up for her bi-weekly newsletter at Purposeful Connections. 

When Carol began her work, companies and brands questioned “if” they should engage with social issues.  In today’s totally transparent, social world, it is now about “how” brands and companies express their values and character through authentic engagement with society, she says. We explore more in the Q&A below. Enjoy! 

MK: In many ways, you were the original creator of the “purpose” concept for business. Why do you think now, years later, it is finally catching on?
CC: The real accelerant has been social media. It didn’t exist when the pioneers in the field started talking about purpose in the ‘80s and ‘90s. There also wasn’t a lot of research on purpose in the early days. At Cone, we issued reports [on “purpose”] every other year from consumers, to executives and nonprofits. It wasn’t until the early 2000s when other firms started looking at the topic and investing in research such as Ernst & Young.
Most recently, you have the Larry Fink letter and the Business Roundtable pronouncement. And finally, you have Millennials and Generation Z with different expectations of brands and employers, and believe deeply in transparency. Companies are facing a huge war for talent, for the best, smartest people. They are competing against the tech world. And young people want to work for a company they can believe in and that has strong values. So, it’s coming from many different places today, and, together, shining a huge spotlight on the importance of purpose.
MK: What companies and individuals have stood out for you as pioneers and true leaders in creating purpose-driven organizations?
CC: First there were the early adopters, the real leaders. People and organizations like Ben and Jerry’s, Jeffrey Hollender [co-founder of Seventh Generation], Anita Roddick [founder of The Body Shop], and Tom’s of Maine. They believed – in their gut – that business was created around social issues. They were, frankly, radical, disruptive and very early in this journey.
Then, there were business people that knew they had to give back. Some of it came from the Jewish religion where giving back is simply part of its tenets. People like Robert Haas from Levi’s, Paul Fireman from Reebok, Jeffrey Swartz from Timberland, the Hassenfeld Family and Hasbro. No one has ever looked at this connection with religion, but it’s interesting.
You have always had pockets of it [purpose] happening. Just look at the J&J credo. Globally, the Tata Group in India may be the oldest socially responsible firm in the world. It started in 1868 and established from its beginning that two thirds of its profits would benefit society.  More recently, the Mahindra Group – also an Indian company –  was founded in 1945 with their purpose to “Rise” – to help people and society rise through innovation.
And then you have Paul Polman, who transformed Unilever by going back to its roots to focus on hand washing and hygiene with Lifebuoy. He has been the most vocal and eloquent global executive on purpose. For Unilever, it’s not about giving money away, it’s about their business. Whether Dove, Vaseline, Knorr, Omo and so many others. Another lesser known manifestation of Unilever’s purpose is Project Shakti, Unilever's rural direct-to-consumer retail distribution initiative. Unilever went to people who didn’t have access to retail outlets in India. They identified women who could take on this enterprising and highly local idea. Unilever trained them to be sales persons to sell very low-cost Unilever products, such as soaps, to other women in the country side. It helped these “Shatki women” earn an income for themselves and their families. It was a brilliant approach.
I’ve also worked with some really prescient CEOs of very traditional companies. For example, James Preston, former CEO of Avon, who, in 1992, turned to his team and asked about cause-marketing. Preston said, “We give a job to Avon ladies. We reach them in their head, but not in their heart.” That foresight to “get them in their heart” led to Cone’s partnership with the company to create Avon’s  Breast Cancer Crusade, which was an emerging issue for women at the time. Over the years, it grew to reach 50 countries worldwide raising over $1 billion.
And then there is My Special Aflac Duck, the social robot we created to support children with cancer, who undergo an average of 1,000 days of treatments.  He’s made a huge stir in the purpose world, winning highly prestigious Best in Show honors at the Consumer Electronics Show, SXSW, two Cannes Lions and Time magazine’s Best Inventions for 2018.  But most of all, his impact stirs our collective souls as he has been donated for free, by Aflac, to more than 5,000 pediatric cancer patients.
These are all leaders and companies who had a sense of obligation to re-invest in society and deepen their relationship with communities and employees. Keith Weed, Chief Marketing and Communications Officer at Unilever, said it best: “It’s time we stop marketing at people and we need to matter to them.” You can use the word “purpose,” “shared value,” whatever, but it’s ultimately about mattering to people.
MK: How do you envision CSR will evolve in the years ahead?
CC: The future of CSR and purpose is truly taking hold. The Business Roundtable pledge gives an indication of the growing shift from short- to long-termism. 
Another example is the CECP, who I’ve been a great friend with for 19 years when they were the Committee to Encourage Corporate Philanthropy. Now in their 20th year, they have evolved to become Chief Executives for Corporate Purpose, recognizing the need for integrated purpose within the organization to impact all stakeholders. Within the past few years, they launched their Strategic Investor Initiative, which provides opportunities for companies to present their long-term investment and growth strategies to Wall Street. This is a critical action…to prove to the Street that investing in purpose in the long term can pay off handsomely … this is huge.
Hopefully, we’ll also see more CEOs like Mary Barra [CEO] at GM who had to reinvent the company and re-define its purpose to evolve with the dramatic changes in the auto industry. Under her leadership, GM launched its Zero, Zero, Zero vision: Zero emissions, zero deaths, zero congestion. It’s a 20- to 30-year vision of how their business with evolve. That is how we need to see purpose evolve.
MK: What are your go-to sources for news and information on corporate responsibility and social impact?
CC: First is the weekly Just Report from Just Capital. They are really nailing it in terms of what constitutes a just company.  If you want to see leading cases and best practices, I recommend Sustainable Brands.  Triple Pundit is great for sustainability. And, I really love Fast Company’s Compass for cool emerging ideas, many of which have a sustainability lens.
MK: A final word?
CC:  Never, never give up your purpose journey, to make it more strategic and impactful with employees, customers, communities, supply chain and shareholders too.  Keep on mattering.

Thursday, September 5, 2019

Connecting with a Serial Connector: Susan McPherson

Susan McPherson commands the room. 
If you work in the social impact space you most likely know Susan McPherson. She is a self-described serial connector, angel investor and founder and CEO of McPherson Strategies, a communications consultancy focusing on the intersection between brands and social impact.

I had the chance to connect with Susan recently about her 25 years in the social impact space and her take on current corporate social responsibility and purpose trends. Read on to learn more!

MK: What makes you most proud of McPherson Strategies and what you’ve built over the past six years?
SM: That we are still standing!! Joking. I’m most proud that we have stayed true to our mission of helping organizations better communicate and share their social impact with the audiences they intend to reach.  Also, proud of the work my team has consistently and relentlessly managed and created.
MK: Do you feel that being a woman-owned enterprise gives you a unique perspective into the work you are doing?
SM: Being a woman definitely has its advantages when you are working on reproductive issues where women are facing major hurdles in today’s political environment, but being a woman of diminutive size, speaking in a boardroom and commanding a presence can always be challenging.

MK: What is your take on the Purpose + Profit wave that is catching on among corporations?

SM: I believe business, like everything else, reacts to the times and the nature of what is happening throughout the world at any moment.  We are certainly living in an era that we have never witnessed before, and business is trying to adjust in a way that will 1) make it sustainable in the long run, and 2) continue to be profitable, while also being transparent and inclusive. Not an easy task when you consider how complex and large some companies have grown. With millennials (and those younger) wanting to work for companies they perceive have purpose and wanting to buy products from companies that are putting people, environment and social causes first, the pressure is on companies to react positively.

MK: Is there a risk that Purpose will not permeate beyond a company’s marketing department? How do you mitigate this with your clients?
SM: We won’t work with companies unless it is a REAL program. We believe strongly that “just” a marketing campaign will fall on deaf ears.

MK: How have you been successful in making the business case to the C-suite and board level for prioritizing social and environmental factors as an integral part of corporate strategy?
SM: We have been successful by proving it works and tying results to the bottom line. Nothing speaks like an increase in applicants, improved retention and new revenues to convince the C-suite and the board.  Competitive pressure also helps immensely and by showing data and the competitive landscape, you will be successful in changing mindsets.
MK: You are an angel investor. Can you share what motivated you to get involved in this space, and specifically in women-led technology start-ups such as iFundWomen, Inc., and The Muse.?
SM: Honestly, there is no greater joy than helping an entrepreneur realize her dreams. I have always tried to be charitable and donate to causes, so I extended that to invest in women launching innovative businesses. We all know the statistics around how minimal funding goes to women and especially women of color. I want to do what I can in my little world to help offset that.
MK: You describe yourself as a serial connector. Can you offer advice for those just getting started to build connections and follow in your footsteps?
SM: Lead with asking questions, be curious, listen more than speaking (We have two ears and one mouth for a reason.), ask how you can be helpful, introduce to others.  These are just a few things that come to mind.
MK: I also hear you are writing a book. Can you give us a sneak peek at what it will be about?
SM: The book is all about how meaningful connections -- the ones that stand the true test of time -- are what really boost our careers and supercharge our lives.  Especially important given we are living in a time where there is such pressure to “transact” and gain followers, rather than develop long-term, mutually enriching and beneficial relationships.
You can learn more about Susan and McPherson Strategies at