'Davos' showed corporate affairs is critical in ESG era

Having ‘attended Davos’ last month from the comfort of my home office - usually held in the Swiss Alps each January, this year’s event was held virtually - I was struck by what a defining time we are living through.

'Davos' showed corporate affairs is critical in ESG era

I had been poised to write an article touching on the critical themes that emerged from this virtual World Economic Forum: the social inequity that has been compounded through COVID-19; an accelerated need for real climate action; and the opportunity for a common way of measuring our progress against ESG themes.

However, I paused to consider whether my voice, that of a corporate affairs leader, had a valid place among the insights and reflections of global CEOs and the world’s political leaders.

But the truth is a corporate affairs function in any progressive organisation today has both the responsibility and opportunity to help navigate and shape business decisions for long term success, which naturally means confronting some of our biggest global environmental, social and governance (ESG) issues.

Corporate affairs has evolved into a critical strategic function that takes the needs of multiple audiences into consideration - our people, our clients, analysts, shareholders, governments, NGOs and the broader public. It’s fair to say that the desires of these audiences will oftentimes be at odds with each other. Our role is to help navigate those contradictions and work with the business to determine the right course to take, for today and for the future, and in so doing, build the foundations of trust.

Corporate affairs today is as much, if not more, about shaping actions than crafting words. Whether that means working within an FMCG company to help redefine the product offer; catalysing a change in packaging or supply change in the retail industry; or responding to social inequity by encouraging meaningful inclusion and diversity targets at a professional services organisation.

By listening to and engaging with multiple audiences with diverse perspectives (including our sternest critics!), by looking at the important trends affecting our industry and society, and by overlaying our organisation’s purpose and capabilities, we offer a unique perspective to support organisations make sound decisions.

Once those decisions are taken, we also play a role in measuring progress and holding ourselves to account. One of the hot conversations during ‘Davos’ was whether organisations need to factor broader ESG metrics into their reporting. Climate risk reporting is well on its way to becoming common practice, and I believe the societal and governance measures will be quick to follow.

Which brings me back to the virtual Davos of month. It was clear that the ESG agenda was more relevant than ever. Leaders are calling for greater partnership and collaboration to address the existential threats facing the world today.

The public is becoming ever more vocal in challenging the established way of doing things; customers are no longer content to simply take their business elsewhere; through online campaigns, social activism, and even highly targeted share trading, people are actively calling on leaders to adapt their business decisions for a greater good.

As for our corporate affairs voice, it is true that it may sometimes remain more quietly behind the scenes, but our voice in the boardroom is critical in helping to restore the levels of trust that are so seriously eroded in society today.

Jane Lawrie is global head of corporate affairs at KPMG International. KPMG recently launched 'KPMG: Our Impact Plan', which reports across its ESG goals

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