In public relations, there’s a saying: “Don’t let a good crisis go to waste.”
Sadly, some companies haven’t abided by this old adage, and to their detriment.
Amid the COVID-19 pandemic, some brave companies – clearly focused on people over profits – did things like Allstate giving $600 million back to customers because, obviously, there are fewer car accidents when everyone’s stuck at home watching YouTube. Meanwhile, other companies – notably some automobile manufacturers – still seemed intent on selling us a new vehicle (but don’t worry, you can defer payments ‘til this is hopefully all over).
Why does this matter so much?
These companies’ actions matter because we live in unprecedented times. In a newly transparent world, we can peer into the windows of companies to see whether or not they are being honest about what’s going on in the world, what’s happening in the minds of consumers, and what’s occurring within their own ranks of employees, partners and customers.
And the spotlight has perhaps never shone brighter than right now in the middle of a global pandemic.
In fact, a recent investor survey, that queried participants totaling nearly $13 trillion in assets under management found that more than 70 percent believe unforeseen events like COVID-19 will spark investor interest in tackling issues like the climate crisis. And more than 50 percent said the pandemic would be positive for ESG (environmental, social and governance) momentum over the next three years.
This makes sense since, with more information, we investors will invest more thoughtfully and in places that align more closely with our values. After all, we investors have reputations to protect, too, and no one wants to be responsible for taking our bright future away from younger generations.
In a way, the pandemic has accelerated the ESG movement faster than any of us might have imagined: It has given us more free time to research, a bigger spotlight on what companies are doing in a crisis, and a rare opportunity to step back as a community to ask ourselves how the public and private sectors help or hinder us lowly consumers with their beliefs, values and actions.
Meanwhile, thanks to organizations like Just Capital, we can measure outcomes based on ESG factors like never before, with research showing that companies that act more justly — more honestly on issues important to the consumer public — earn a return on equity (ROE) that is 6.4 percent higher than peers who don’t rank well on matters like workers’ rights, environmental issues and more, giving organizations a real monetary incentive to start caring about not only what they do, but also how they do it.
No matter what happens in the coming months, long-term ESG trends will only grow until they become not a factor but the factor in how we invest our time and money, both as investors and as more thoughtful consumers and employees. It is inevitable because, as I’ll paraphrase from Martin Whittaker, the CEO of Just Capital and one of the amazing CEOs I interview in my book, folks behave differently in the light than they do in the dark.
No matter what, history will be on the side of honesty and transparency here, if for no other reason than we now have more knowledge and awareness about ESG-related issues than ever before.
For some companies this will be a death knell. For others, however, the truth will set them free — and the environment, our fellow citizens and the free-market economy we depend on will all be better off for it.
Image credit: Ying Ge/Unsplash
Peter Kozodoy is an Inc. 5000 serial entrepreneur, TEDx speaker, and business coach who works with organizations and their leaders to help them overcome self-limiting bullsh*t and use honesty to achieve greatness. His articles on leadership and entrepreneurship have appeared in Forbes, Inc., The Huffington Post, PR Daily, and more. He holds a BA in Economics from Brandeis University and an MBA from Columbia Business School, and lives outside New York City with his wife and their spoiled dog. To strike up an honest conversation, visit peterkozodoy.com.