Complacent Marketing
The Real ESG Challenge : Aligning Corporate Stories With Stakeholder Interests
By Diana Obath
In Africa ’ s rapidly evolving corporate landscape , Environmental , Social , and Governance ( ESG ) reporting has become a leading conversation for companies striving to demonstrate their commitment to sustainability . However , a large disconnect still exists between what companies communicate about ESG issues and what stakeholders genuinely want to hear .
Reports from Dentons Global Advisors highlight the reality of this gap , revealing that companies often focus on topics like product design and lifecycle management while stakeholders are much more concerned with greenhouse gas ( GHG ) emissions , the impacts of climate change , and ethical business practices . Despite the increasing number of ESG-related disclosures by companies in Africa , the disconnect is evident in the apathy and lack of understanding among customers and stakeholders on the real impact that the business community has on important issues such as climate change and environmental conservations .
ESG storytelling will be critical in promoting the climate change agenda now more than ever , serving as a bridge to closing the climate gap . While experts meet at forums and conferences , these gatherings represent only a small fraction of the real impact that ESG reporting , and accountability are intended to achieve .
Focus on the Wrong Topics
Many companies , especially those in sectors like production , banking , telcos , mining and energy dominate the ESG
A well-crafted ESG narrative involves more than a dry recitation of policies and metrics . It should tell a story that connects emotionally with stakeholders , addressing their concerns and aspirations . By framing their ESG initiatives within the context of community values and traditions , businesses can create a more relatable and impactful narrative .
conversation . However , stakeholders are still largely disengaged from these discussions and often have more questions than answers on how these companies are mitigating and measuring the negative impacts on the environment . In Africa , where communities are directly affected by environmental degradation , there is a pressing demand for transparency about GHG emissions and their impacts . Companies must realize that discussions about corporate sustainability cannot ignore these pressing realities faced by the communities in which they operate .
A classic example can be seen in many cases where organizations carry out exploration or extraction activities and communities in the surrounding areas are compensated for the land acquired by the organization . The communities that remain close to these fields often experience prolonged exposure to pollution over time , yet the company may not build any hospitals in the area . Instead , in its ESG report will focus on the number of trees planted and road constructions intended to improve access to the area , failing to disclose that prolonged exposure to these toxic chemicals such as lead and sulphur can lead to severe disabilities , for example .
While environmental and governance issues are addressed , social accountability is often overlooked . The scenarios vary , and ESG storytelling frequently focuses on the positives while neglecting community education , which has led to misunderstandings among stakeholders . How can ESG be a good thing when its
16 MAL62 / 24 ISSUE