ESG includes major elements of crisis communication
Crisis communication is a major component of ESG
The social and economic turmoil currently faced by most countries has brought to the fore several critical incidents and systemic risk management concerns, including traditional ESG concerns such as human capital issues, business model and supply chain resilience, consumer welfare and social impact.
As management and boards focus on addressing the immediate-term challenges of crisis situations, ESG factors will be critical elements of both short-term strategic decisions and longer-term strategic planning.
Many companies will face questions from their investors, employees, customers, local communities and other stakeholders over their crisis management procedures, as well as their preparedness for any future shocks.
After all, the foundation of ESG values is that the environment and people should be equal to profit.
Who’s Responsibility, is it?
Though it is the job of the CEO and the top management team to protect the company by developing and implementing the corporation’s response to any crisis, the board should do its level best to ensure that management is prioritising the safety and well-being of the company’s employees as well as those who depend upon the company for services.
To achieve this, basic operational procedures need to be in place for crisis prevention, crisis management, crisis communication and crisis resolution, way before it happens.
This is the professional way in which we prepare for any crisis.
And these procedures, which need to be drafted and practised, make a very long list, there are no shortcuts, and much training will also be required.
From Lighthouse's perspective, here are the top 5:
1. Maintaining close contact with the CEO and working with management to ensure the safety and well-being of the company’s employees, investors and other stakeholders as well as the public at large.
2. Understanding the risks to the company and its stakeholders and discussing strategies for minimising and mitigating these risks.
3. Reviewing the viability of the enterprise from a short-term and long-term perspective, to empower the organisation with the necessary crisis measures to protect the people, business and brand.
4. Appropriately messaging the company’s actions with respect to a crisis and providing the CEO and management with assistance in handling communication across all internal and external stakeholders.
5. Establishment of a specialised crisis cell, with responsibilities of communicating frequently with applicable regulators, suppliers, staff, investors, news media and government agencies with oversight.
CEOs need to adopt business protection measures
We recognize that our engagement conversations will shift to more immediate ESG issues such as employee health, serving and protecting customers and ensuring the overall safety of supply chains in the context of any crisis – the scope and duration of which none of us can accurately predict.
However, we continue to believe that ESG issues must be part of the bigger picture and clearly articulated as part of your company’s overall business strategy.
With this in mind, we encourage you to refrain from undertaking undue risks that are beneficial in the short term but harm longer-term financial stability and the sustainability of your business model.
Communicate to investors the processes and procedures that you have put in place to safeguard the business and hitherto its people, covering assessments of potential impact to your business, overall operations and supply chains, including management preparedness, scenario planning and analysis.
Lighthouse PR, based in Bucharest, and its management team sit on the EU SME Development board and the CMO Council. It is also a valued member of the prestigious Crisis Communication Network Europe. It is the only member in Romania and SEE, with network offices in 14 countries across the EU.
