On June 30, 2021, WPP hosted an investor event entitled Building Better Futures "to discuss our environmental, social and governance (ESG) strategy and how we are helping clients grow inclusively and sustainably." A few days later, the PRWeek article "WPP's Mark Read on ESG and turning down clients who don't ‘do the right thing' quoted Read as saying "demand is off the scale" for ESG-related work and that issues like "climate change, racial equity, privacy and responsible marketing" are increasingly important to brands, but also matter to employees who "want to work for companies with whom they share the same values." So, as advertising reckons with a talent drain in the midst of renewed scrutiny of its chronic failure to diversify its workforce, will ESG help agencies forge a new path forward or instead simply become just another brand promoting style over substance?
WPP isn't alone in recognizing the business case for ESG. As Campaign U.K. reports, the Institute of Practitioners of Advertising (IPA) found that "ESG can give agencies the competitive edge" and "be a valuable differentiator to clients choosing an agency." And then there's the Campaign U.S. article titled "The Rising Marketing Megatrend: ESG." Oh, wait. That's a promotional feature (aka paid content) from Bloomberg Media. On second thought, that's perfect: a research company's sales pitch on what the "ESG gold rush" means for people working in "marketing functions, in media sales, ad agencies or client side." Here's some excerpts from the article's video explainer:
"Our team specializes in providing actionable insight on environmental, social, and governance. Whether it is a global Race to Net Zero, or the Extinction Rebellion campaign -- the E. Workers' safety conditions or the Black Lives Matter movement -- the S. Diversity on boards, or big tech battles around data and privacy -- the G … Simply put, ESG has moved from a trend to a key component of the company's corporate and financial strategy … Companies with poor ESG performance have proven to be more volatile and more at risk of brand value reputations and margins at risk … It is precisely because of the ESG momentum that regulators and market authorities in Europe, China, and now the U.S. are accelerating ESG requirements to both corporations and investors."
In the United States, the world's largest money manager Blackrock has joined shareholder activists like As You Sow in calling for more transparent ESG reporting from publicly traded companies. So it's no wonder the Securities and Exchange Commission (SEC) is now weighing whether to make such disclosures into regulatory requirements with consistent standards and scoring systems that could be more easily compared across companies by discerning investors.
The Bipartisan Policy Center expects the SEC to announce rulemaking on climate disclosure in October "with board diversity and human capital soon to follow" and reports that the Corporate Governance Improvement and Investor Protection Act (House Resolution 1187), which passed the House of Representatives and is now on its way to the Senate, would require ESG disclosure and standardized reporting metrics for a range of issues including workforce demographics, board diversity, and workplace harassment and discrimination to help guide "sound investment decisions." So, we could very well be headed towards a new era when corporate social responsibility will be subject to—imagine that—actual public accountability. In other words, a time when good outcomes matter more than good intentions.
And yet, when you're a hammer, everything looks like a nail. So I worry that advertising will embrace ESG less as a check and balance and more as a tool of perception and persuasion. For example, when Ad Age reported that the Association of National Advertisers (ANA) was "ranking brands by Environmental, Social, and Governance impact," it claimed that the trade organization will maintain an index updated monthly so "consumers and brand watchdogs have a new way to keep track of how brands are measuring up on their purpose-driven promises." But the index doesn't measure whether those promises were kept; it only measures how they are perceived.
Like Bloomberg, the ANA also posted a video explainer for their ESG index (or Swayable-ANA ESG Brand Perception Index Poll to be exact). But this one ratchets up the production values by adding actors to play earnest executives at work and smiling citizens at leisure, an epic soundtrack to pull at your heartstrings, and soaring drone shots over urban (technology!) and natural (purity!) locations. They even one up Bloomberg's clichéd b-roll of #BLM marches and perfunctory Greta Thunberg file photo with a more stylized (and yet conveniently less specific) slow-mo hero shot of a young woman of color with a raised fist holding up a smoking road flair -- a generic protest gesture as empty as Kendall Jenner's Pepsi. After all, the ANA isn't measuring what brands are doing to meet their ENG commitments -- only the popularity of their polling. As the voice-over explains, the point is not to actually hold brands accountable, but rather help them fine-tune, promote, and amplify their virtue signaling:
"In our fast moving digital world, where consumers encounter thousands of messages a day, effective storytelling is key. More and more consumers seek out brands that share their values on Environmental, Social and Governance issues … But in a crowded, noisy marketplace, consumers are flooded with conflicting information. How does this drive competitive advantage? How do brands know that consumers have gotten the message? The answer is simple. We ask them."
As of this writing, Hershey and Dove were tied for first place in the Swayable-ANA poll. Which makes sense. Who doesn't love chocolate?
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The opinions expressed here are the author's views and do not necessarily represent the views of MediaVillage.com/MyersBizNet.