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Importance of awareness-building for ESG

We’re just starting to learn how pervasive awareness needs to be throughout the culture regarding environmental, social and governance (ESG) risks, says one partner.

user iconJess Feyder 08 September 2022 Big Law
Importance of awareness-building for ESG
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Eric Boone, Madison Marcus partner and division leader of sustainability and ESG and banking and finance, recently reflected on the moment that his drive for working on ESG, particularly modern slavery, was ignited. 

I’m sitting in a law firm conference room, and everybody was talking about this anti-slavery movement, and I was somewhat moved.

“But it was just a picture of an Indian man at a brick kiln with what I call, his ‘freedom papers’, which symbolised the extinguishment of his debt that brought him and his family into modern slavery,” he said.

 
 

Mr Boone noted that because of his African-American heritage, knowing he had ancestors who similarly carried “freedom papers”, the issue resonated strongly with him.

“Just to know that slavery is still alive and well hundreds of years later astonished me and made me want to do something about it, professionally and also personally,” he said. 

From there, I became really impassioned about it. It became a pro bono focus of mine and led to a practice area when the Modern Slavery Act became enacted [in Australia].”

Just like how his involvement in modern slavery was sparked, so too has his focus on ESG matters heightened in broader society by increased awareness of environmental, social and governance issues. 

A spotlight on ESG issues comes from major media companies, societal movements, like the MeToo movement, and many forms in between, Mr Boone noted. 

There’s been an increased focus on inclusion, on the social impact of work along with environmental impact, he said; overall, there’s an increased awareness of risk.

“As consumers have become more educated on issues, there’s the need to appeal to consumers as a stakeholder group,” he said. 

“Employees are also more educated about these topics.”

“With increased awareness, I find that people are increasingly willing to act,” he said. “It is all about increasing awareness.”

He spoke about how public prosecutions have played a necessary role in building awareness, by allowing people to “see it, identify it, and become more aware of it in their choices, in who they support”.

Mr Boone noted that as awareness of ESG issues has increased, there is an increased ability to have greater discernment about statements made by companies, along with pressure for ESG reporting to step up and become more sophisticated.

“Directors are becoming increasingly aware of the risks associated with their own liability of approving statements about the ESG work they do,” said Mr Boone. 

Mr Boone advises his clients to increase their level of reporting, looking further down the tiers of their supply chain and fully across their operations.

He emphasised the importance of organisations reporting in ways that are veracious and transparent. Reporting falsely or with exaggeration shows “a disregard for their audience — to think that they are so naive about it”.

“If you give somebody a fulsome view of your remedial course of action, I would take that more to heart. 

“I would believe in your authenticity versus you just telling me you have a zero-tolerance approach to an issue,” he said. 

Mr Boone said organisations should look at ESG reporting as a “compliance measure”. “It’s really your chance to engage with a multitude of audiences about what you’re doing in a way that should not actually cost you money, but should bring you greater customers, bring you greater clients, and bring you greater recruits,” he said.

He reflected that in Australia, the level of reporting needs to be lifted, so that ESG reporting is honest and reflective of the business, all while being effective in its impact.

“I kind of have this wheel, how do you embed, how do you engage, how do you make it a consistent engagement, and how do you evolve those practices to deal with the issue, and also, how do you deal with the intersectionality of it, not just with social sustainability, but with environmental sustainability,” he said.

Mr Boone reflected further about the kind of reporting that is necessary and effective. “I sometimes have pushback with NGOs and academics who want to be very template-ish in the reporting.

“I say to them, ‘I’m okay with pictures being in the document, what brought me to the anti-slavery movement was a picture.’

“I had some of the greatest legal minds of Sydney talking to me about this issue, but it was actually that picture that engaged me.

“We need to recognise the avenues of how to better engage people around issues, whether it be people within your company, or even in your firm.

“I always find that when people hear about it, they get engaged. They lean in. We want people to lean in to really start to look at the issue and see what they can do,” he said.