Disruption by Data

The advent of big data and digital media has created a circular information economy with significant ramifications for your business. 

The volume of data at our fingertips could not have been predicted ten years ago and is fundamentally changing the way we live and work.  You, your clients and investors, now have access to an overwhelming, exponentially growing, amount of information.  The internet has democratised and provided new media platforms to send it further and faster, with a plethora of data yielded in turn.

Our 21st Century information overload has had an obvious and dramatic effect on industries like media. It is also behind the rapid rise of ESG investing.

ESG (for want of a better term) is nothing new.  Distilled, it’s simply hard-to-define, hard-to-capture information.  It’s everything that could affect your company but which cannot be reduced to a single metric.  What is new is the fact we finally have the technology to (begin to) track complex causality patterns at scale.

The question now is: what kind of data should you gather and share? Different stakeholders say different things.  The type of information that companies consider may vary wildly from the type of data consumed by investors.

We recently noticed that the term ‘ESG’ sometimes prompts bristling.  It is not that stakeholders resist the concept.  But they may resist traditional ESG categorisations, preferring to think more broadly about their sustainability programmes, stakeholders and objectives.  This, we refer to as sustainability.  There are many other terms floating around different departments: corporate social responsibility or CSR, brand or reputation, culture or purpose.

On the other side of the table, investors prefer to talk in terms of ESG, or material risk.  For them, ESG issues matter because they bear on a company’s long-term performance.

This divergence in perspective, the difference in language, between investors and your company and even between departments within your company, makes ESG communications a complicated business.  The challenge - and opportunity - is understanding what information matters to whom and owning the story around it.

Financial data is straightforward.  It’s binary.  You’re up or down, green or black.  It makes financial reporting relatively straightforward and thus the cornerstone of capital markets.

Extra-financial data, on the other hand, is nebulous, complicated and nuanced.  Throw in globalisation and international supply chains, and the picture becomes even more of a Pollock.

But the new world of data proliferation and information sharing make it, at least, at last, accessible.

That is an incredible opportunity for investors. Before, shareholders could only measure a company based on a slice of intelligence.  Now, they can—theoretically—evaluate the entire pie.

It is also an incredible opportunity for your business.  What can be measured can be managed.  

Like any other language, data—whether it relates to carbon or culture—needs to be translated for your stakeholders.  Understanding your company as a sum of its parts, and building a compelling and comprehensive narrative around that, is what strategic communications is predicated on.  Data strengthens the story.

Technological disruption has shaped many industries before now.  Traditional media has been irrevocably changed with the advent of the Internet and social media.  Finance is undergoing a dramatic shift, with a proliferation of data and machine learning enabling ESG investing at scale.  Now, the way you market your business is on the brink of disruption.  

It is time to bring data into the heart of your perspective and practice.