Balancing Act

Your business is judged on quarterly returns whilst it may take years to reap dividends from ESG activities.

Leaders need to demonstrate short-term delivery and long-term responsibility. Otherwise, just like the ousting of Emmanuel Faber from Danone, our future could be decided for us. We need to draw insight from the unlikeliest of places: a circus act, juggling and balancing counterintuitive weights for applause from the crowd. 

Although it can seem daunting, the latest letter from Larry Fink re-enforces the need for stakeholder capitalism, recognising the mutually beneficial relationship between businesses and key stakeholders. Dan Schulman of Paypal equally recognises the need for businesses to be part of our societies focusing on the medium and long term not just the next quarter. The reality is a balancing act isn’t always clear cut.  

The question is: do you focus on the short term to ensure there is a long term?  

In a world juggling climate change, social inequality and racial injustice, we need action on all fronts. As Bernard Looney of BP recently remarked: “we’re all in on the transition”.  

As businesses, we need to ensure these actions align with our current business strategy and are not a distraction. Ensuring ESG alignment with business strategy will ensure we have a future licence to operate.  

The first step is to understand what is materially important to our businesses and how we can positively impact those areas. Set clear goals with interim targets and communicate it to key audiences.

Shareholders, clients and employees are waiting to hear we recognise our responsibility to both short term results and long-term sustainability.