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Protecting corporate brand means redefining P&L for a world of weaponised words

Corporate Brand
By Andrew Adie
11 July 2024
Corporate Reputation
Green & Good (ESG and Impact)

Weaponising words is becoming an alarming trend in our very binary world.

The space for nuance can seem a distant dream.  You’re either ‘for’ or ‘against’ something and in either camp the walls are high and the drawbridges shut tight. You don’t talk, you SHOUT. You don’t listen, you broadcast. You don’t share, you shame.

This very polarised approach has been in the spotlight during the elections. Elections plural, in the UK and around the world in this year of democracy. When it comes to climate change, the dividing lines are getting sharper. You either believe in woke capitalism (and it doesn’t take much scratching to reveal climate change denial under that surface) or you believe we need to move faster to address a climate emergency that is getting worse. Each side passionately believes that the other is wrong.

The result is that ESG and net zero are increasingly being weaponised and the phrases used as blunt tools to represent the failure or promise of political ideas, and the failure or potential of investment opportunity and corporate behaviour that pivots towards a greener, more responsible corporate and planetary future.

In this world we see corporates scrutinised for both greenwash and greenhush, both polar positions which are deemed to be bad. They equally face activism (both from protesters and investors), either calling for faster progress towards social and environmental leadership or away from it.  

So what do corporates opt for? A world in which they’re just slightly bad or slightly good, on the assumption that they might just please some people some of the time?

Only, the world doesn’t work like that. What we are faced with is a world in which business has to play both sides off against one another, listen and understand the drivers that sit behind these polarised positions and try to find a middle way. 

What they shouldn’t do is get side tracked by the noise and make compromises which ignore climate science or the wider macro trends that will shape their and our future. 

For corporates looking for clarity in a world of fudge, I think we need to look at how corporate reputation is measured and what defines ‘good business’.

In the past everything was about P&L, the money you made for the business and its investors. Today corporate reputation is a two-sided coin, on one side is money, on the other is values. 

Increasingly people are aligning themselves with organisations that reflect their world view and beliefs. The concept of a good company being one that only generates stellar cash flow and profit is long gone. 

Profit & Loss may dictate a short term (year-end to year-end) measurement of corporate success, into the long-term a different form of P&L is the measure; Performance & Legacy.

Performance covers P&L, investor return, value generation, market share but all that is for nothing if the business isn’t also generating a social and environmental legacy that supports its values and underpins its brand and mission.

In a world of Performance & Legacy, corporates need to tell different stories to different audiences and convince both that the wider strategy (both sides of the coin) brings greater value than a more isolated and binary approach that only delivers against one broad metric.

Is that possible? Absolutely, there are many businesses doing exactly this but those that do are making bold decisions. In a world that is calling corporates out for green wash and criticising and weaponizing ESG and net zero, they are businesses that stand-up to be counted, that see through the noise and which see a longer-term picture.

Redefining P&L (Performance & Legacy) may be criticised as a glib headline message (inevitably in our binary world) but in reality it focuses down on the core drivers of reputation and success for business today.

While the noise maybe great, communicating what you are doing, transparently, courageously, and incisively and with authenticity to directly speak both to audiences who embrace what you’re doing and those that criticise you for your world view is essential if we are to avoid a world of beige indecision.