From "Everything Everywhere All at Once" to "Not Much, Anywhere, Anytime Soon"?

When talking about ESG (Environmental, Social, Governance), I often use the analogy of ‘Everything Everywhere All at Once’. This movie won the Academy Award in 2023 and is now one of the most awarded films of all time. However, if you ask someone who’s seen it to tell you what the movie is about, they will probably struggle to explain it to you. Just like ESG – which is a complex and confusing topic that can be tough to explain because it’s about, well… Everything Everywhere All at Once.

It’s about how a business affects the environment, including carbon emissions, pollution and recycling, waste management, and energy use. It’s about how a business treats its employees, customers & communities, including diversity and inclusion, HR policies, safety and charitable work. And it’s about how a business is run, ensuring it’s run ethically and in a way that manages risk. Adding to the complexity is the fact that ESG is everywhere: it’s important to public and private sector organizations, as well as citizens, around the world.

I’m now coming to the view that perhaps the problem with ESG is just that: its inherent lack of single-mindedness. By design, it is broad, unfocused, and all encompassing. In business, this translates to touching every functional area from supply chain to corporate affairs to product development.

There is so much pressure on businesses today to DO it all and TELL it all – which leads to a myriad of problems including greenwashing.  A business’s ESG report can seem like a laundry list of all the good things it is doing, and many corporate ESG reports sound the same.

And the fact is that we are not making enough progress on the ESG agenda. More than 60% of businesses are off track to meet their sustainability goals. The risk is that the ambitiousness of the ESG agenda could lead to Everything Everywhere All at Once becoming Not Much Anywhere Anytime Soon. Wouldn’t it be better to do fewer things really well?

We know that citizens are increasingly concerned about ESG. Ipsos’ Global Trends Survey 2023 reports that 75% agree that ‘we are headed for environmental disaster unless we change our habits quickly’.  And in our monthly What Worries the World survey, poverty & social inequality is consistently a top-3 global concern.

So how can we make more progress?

ESG in the limelight

Over the past year, we’ve seen ESG increasingly take center stage. Citizens and institutions have started prioritizing sustainable practices and social impact initiatives. ESG is increasingly showing up as a key component of business strategy. Companies are recognizing that ESG is a source of value creation; it’s not only the right thing to do, but it’s also good business and an expectation across stakeholders including customers, investors, and employees. There has also been a greater emphasis on transparency and accountability in ESG reporting, fueled by new regulations including the European Union’s Corporate Sustainability Reporting Directive, which requires companies to disclose their sustainability practices and performance to stakeholders. The problem is that the high level of reporting requirements and the resulting pressure to show some progress across the ESG spectrum has distracted companies from making meaningful progress in advancing key parts of the ESG agenda.

The polycrisis

Today, we are being overwhelmed by multiple crises – or what we call a polycrisis – many of which relate to ESG – social unrest, persistent inequality, geopolitical crises and war, climate change, inflation, mental health, and more.  The natural assumption would be that government would be held accountable for solving these challenges. But people are losing trust in politicians and government, with 72% of citizens globally feeling their government and public services will do too little to help them in the years ahead, according to Ipsos’ 2023 Global Trends Survey. And only 31% of citizens across 29 countries (down from 36% last year) agree that their government has a clear plan in place for how to tackle climate change in particular.

With governments leaving a void, therein lies a responsibility – and an opportunity – for businesses to step up. The companies that consumers patronize have taken care of meeting their needs for years. They touch many aspects of their lives on a daily basis. In fact, people around the world have high expectations of businesses, with 58% agreeing that if businesses do not act now to combat climate change, they will be failing their employees and customers.

How should businesses act?

Citizens are increasingly putting pressure on businesses to deliver against the ESG agenda, holding them accountable for the impact they have on the planet and society. 64% of global citizens say they try to buy products from brands that act responsibly, even if it means spending more. The stakes are higher for businesses today, but this is not without risk: 72% of Ipsos Reputation Council Members say too many businesses use the language of social purpose without committing to real change. With new regulations and a much higher level of transparency being required of companies, vigilant consumers are going to be more aware of the effect of business’s ESG-related actions (or inaction) and will be able to take these behaviors into account in their purchase decisions.

What do citizen-consumers want businesses to do? The 2023 Ipsos Global Reputation Monitor (IGRM) tracking study explores ESG and the most credible areas for involvement for businesses across various sectors. Most people agree that multinational companies should put social issues first, with 42% of people ranking improving society as their top priority, ahead of protecting the environment (29%) and practicing good governance (28%). But the reality is that citizens want it all; none of these percentages is insignificant. And therein lies the rub; businesses are trying to do it all, and not making enough progress in any one area.

It's time to leave Everything Everywhere All at Once behind

It’s time for businesses to focus. We need businesses to step up to drive the ESG agenda, but to make meaningful progress we also need them to focus.

What does this look like?

1. Get your own house in order first

Offering good quality products and services in an accessible way is job one. When it comes to ESG, the IGRM survey tells us that citizens want to see businesses focus on improving their own working conditions and worker health and safety first. Actions to protect the environment should also be focused on concrete areas like reducing the use of plastic, developing more environmentally friendly products, and reducing greenhouse gas emissions. In other words, rather than thinking about ‘saving the world’, businesses should focus on their own ‘house’ and apply the Hippocratic Oath principle of ‘first do no harm’.

2. Help educate your customers

When it comes to ESG, we have a knowledge problem. We call this the Believe-True gap, and we see this acutely when it comes to taking actions to protect the environment. People are confused about what actions to take to have the greatest impact. When asked which of their actions would have most impact on reducing greenhouse gas emissions, one-third pick recycling, and almost a quarter of people pick using less packaging – making these two actions the #2 and #3 most impactful actions in the mind of the public. From the given list, the top actions people can take to reduce greenhouse gas emissions are avoiding driving a car and switching to purchasing renewable energy; recycling is actually in 60th place, and using less packaging comes in at #38. 36% of global citizens say that having easy access to information would help encourage them to take more action to fight climate change. There are a lot of misperceptions and confusion when it comes to ESG.  Businesses can lead the way here, for example by educating consumers through clear labelling on their products.

3. Offer sustainability as a co-benefit

Offer something extra. People want their needs met first – ESG benefits alone will not drive choice – but sustainable claims can tip the scale. Consumers are increasingly looking to businesses to get in the driver’s seat on the ESG agenda, and those companies who are delivering will differentiate themselves. Show consumers that the brand is making efforts to have a positive impact.

4. Communicate clearly, transparently and authentically about your ESG progress

Some businesses are avoiding communication at all due to concerns about greenwashing (when companies intentionally mislead the public by presenting an environmentally responsible public image). But with such an ambitious global agenda and a need to educate citizens, greenhushing is not the answer either. Tell your story but avoid overused imagery and be sure to combine a sustainability message with a brand message. Confront your own issues head on, take responsibility, and deliver on your promises. Own up to where you are making progress, and where you need more time to do so.

5. Choose your ESG battles carefully

Don’t try to do everything at the same pace. Craft a realistic and attainable ESG plan and hold your business accountable for achieving it. This doesn’t mean businesses should have a siloed ESG agenda; this is a potential pitfall. You don’t want to be the company that is making great progress on decarbonizing your supply chain – and shouting about it – and then get called out by your employees for having a toxic work environment. But provided the ‘first do no harm’ principle is followed, it is absolutely fine to progress different actions on the ESG agenda at different speeds with the goal of making meaningful progress.

Everything Everywhere All at Once.

ESG is an overwhelming topic, with high expectations from citizens around the world, and many opportunities to get it right (and wrong). Taking action on ESG initiatives is increasingly becoming a necessity – to win in the years to come, smart businesses will act now to ensure they remain relevant and profitable. Doing well and doing good are not mutually exclusive; it is possible – and necessary – to do both. But in order to make more substantial progress, we need businesses to take on a lead role and be laser focused in driving their environmental and social agendas.

Avoiding the ultimate potential pitfall of Not Much, Anywhere, Anytime Soon is our priority for 2024.