Are Corporate Position Statements on Sustainability Worth the Time and Effort?
Given the urgency for companies to improve their sustainability performance, you may wonder why I am spending so much time trying to get companies to write credible position statements.
“Position statements, really? …that’s what you want to talk about?”
Yep, I do.
Let me try to convince you that, not only do they matter, they can be an effective catalyst to moving your sustainability agenda forward. Allow me to explain.
Over the years, as part of our research for the Embedding Project, I’ve met with a lot of CEOs and boards about sustainability. In the last few years alone, I’ve interviewed over 300 CEOs, and hundreds of board chairs and independent directors. So, what do we talk about? How they are integrating sustainability into their decision-making. How their practices have shifted. What they see as emerging practice.
And one of my favourite questions to ask… What has really shaped your thinking on these issues?
You know what comes up WAY more often than you would expect? Position statements. Baffling, I know. But companies are under increasing pressure to clearly convey their position on a range of important ESG issues.
And here’s the thing: writing position statements is the one time when the executive and the board have some really deep conversations about these issues, where it isn’t just about compliance. It’s a question of ‘what to do we really believe?’
Lately, the Embedding Project has also been helping companies to update their position statements or write new ones based on advice we provide in our Guide on Position Statements. Here’s what I’ve observed from all these different engagements.
Position statements promote productive debate
When companies first start writing a position statement, they usually think it’s going to be a fairly straightforward task. Often, it isn’t. Inevitably, people will start wordsmithing and demanding definitions, they will dig in on things the company is willing to say and not willing to say. Some will be concerned about promising things outside of their control. Or they don’t feel ready to commit when the strategic path to getting there isn’t crystal clear. Others will be concerned the organization isn’t going far enough, that their position needs to be bold and align with what society needs.
But that’s a good thing. These debates are incredibly important, perhaps even more important than the statement. This is where the learning happens. This is where these concepts are internalized. Directors frequently tell me “it was when we needed to take a public position that we were all forced to really come up to speed on this issue,” or “this is where it went from an abstract concept to a set of principles,” or “this is how we really gained clarity and agreement.”
Developing a position statement on particular employee, environmental, social, and governance (EESG) issues helps your executive team and your board deepen their understanding of these issues.
Position statements clarify expectations
The process of developing a credible position statement also helps provide the direction and confidence for management and employees to act. A good position statement will clarify the company’s understanding of the issue and what needs to be done to address it, explain how this issue links to the company’s overall strategy, and clarify what actions the company is committing to take.
Think about a court case: it’s not just the ruling that creates a precedent. It’s often the opinion, the written statement outlining the rationale for the ruling, that really matters when it comes to informing future action (whether that ends up being good or bad).
Back in the boardroom, too often decisions are debated in great detail, but all that comes back to mid-level management and employees is the equivalent of a ruling – yes or no; approved or not approved. That’s not much for employees to go on. Position statements are the exception, they provide more information about the basis of the decision and they spell out what that means for future action. This why they have the potential to be so powerful.
Position statements provide accountability
The final reason position statements can make a difference in advancing sustainability is that they provide accountability. They offer up a point of engagement for investors, employees, communities, and other stakeholders. Not convinced by a company’s statement? Not in agreement with the commitments they have made? Let them know. Post on their social media pages. Reach out to investor relations. Bring attention to the matter. This is the kind of messaging that is sure to get summarized for the board, because a position statement is a board level document (or it should be).
That’s why, for the last two years, we have been compiling a free public database of corporate position statements. We provide a transparent assessment, including links to the company materials we used to make our assessment. You know what’s been promising to see? Many of them are already improving. But some aren’t. Some are replacing originally clear language and commitments with general high-level niceties. And those kinds of changes are pretty important information to have as well. That’s why we keep the old statements – to keep a close eye on leaders and encourage them to keep moving forward. We know that better position statements lead to better sustainability performance. It’s all about keeping that forward momentum.