It’s no news to anyone that British business – at least big business – has had a difficult few years in terms of the spirit of the times.
You could argue that the mood to leave the EU – when things almost universally pointed in one direction and the decision went the other – was a symptom or a cause. In all likelihood both.
But the bitterness has not helped since. The pandemic led to a crisis-time rally that improved the standing of large corporations in voting, along with other national institutions. But that’s a distant memory.
A government trying to push through tax increases has come to the conclusion in recent months that the most painless way to do this is on business. The energy crisis could mean windfall taxes on oil and gas producers. Large house builders are on the hook for the upholstery crisis. When a combination of Brexit and Covid caused severe labor shortages, it was business that stood in the way of an economy with higher wages and higher productivity – at least according to the government.
Perhaps then, it is no surprise that a reading of the public’s view is not exactly glowing. Hanbury Strategy and Stack Data Strategy Research, published this week, found that 56 percent of those surveyed thought business was “out of touch”.
When choosing what best describes British businesses, the 2,000 respondents went for statements such as “try their best in a difficult time” and “just care about making money” in four times the numbers that share sentiments like ” my values ”or” make the world a better place “.
Hanbury’s prescription, founded by former Voting Communications Director Paul Stephenson, is to focus more on the basics, such as producing better goods and services for customers and looking after employees. Talking more about it will better reflect the public’s priorities, the research said, as opposed to environmental, social and governance issues (ESG).
There is a decent hint of anti-wokery sentiment to the findings. But still, it sounds like a challenge for companies and what my colleague Rob Armstrong call the ESG industrial complex equal. If the professionalization and financing of what amounts to asking companies to do the right thing has led to something that does not include very clearly treating your staff well, then everyone has a problem. See Terry Smith’s Criticism of Unilever this week: purpose-driven mayonnaise is not a ridiculous idea, but it is basically meant to deliver a product that is more interesting or relevant to customers, or more likely to motivate and retain staff.
It’s not that the public is now just worried about things affecting them; the strong interest in climate change issues in the Hanbury results shows this. But the results point to a well-known shortcoming within ESG: that the social part of it is overlooked and that investors are not asking the right questions within it. ShareAction Responsible Investment Campaign has found that investors are more likely to vote for environmental or management decisions than social decisions.
The group insists on better information from companies about their workforce. His latest data, released this week, received responses from only 173 companies out of the 1,000 surveyed worldwide. The FTSE 100 performs better with half returning at least a few numbers. Last year, the average completion rate was about 60 percent of what a detailed survey is.
The charitable interpretation is that companies are too busy treating their employees well to fill out endless forms (and increasing requests for disclosure are one of the biggest complaints about the ESG machine). This is not entirely unfounded: about half of the blue-chip index is accredited Living Wage Employers, and only about 55 percent of them contribute to the ShareAction disclosure initiative.
But what questions companies choose to answer is also revealing. The best response rates in the past have been on governance issues such as board responsibilities and policy statements, which are unlikely to capture the public’s imagination. The spirit of openness does not extend so much to the neat wage, conditions or security. Staff turnover seems to be a well-kept secret, says ShareAction’s Rosie Mackenzie. And in other areas, such as who works in the supply chain and where, companies simply do not collect the basic data, she says.
Businesses should know more and talk more about their people. And ESG investment, properly done, should be a part of it.