Interview transcript
Teymoor Nabili
Let’s talk about the Council and the Conference Board and its role in Asian corporate leadership in just a moment. But I want to start by getting straight into the heart of what you’re doing with this particular initiative, and the research that you’ve been doing around social media and corporate behavior. And the thing that jumped out at me from the report that you’ve done, and that is that Asian companies, local Asian companies, in particular, but regional Asian companies also are less engaged with ESG, and issues around climate and environment than are international companies. Is that a fair conclusion from your summary?
David Hoffman
I think our study, this Asia Corporate Purpose Monitor, does suggest that Asian companies are communicating less on corporate purpose related topics. And by that we mean, all of the ESG, good conduct that a purpose driven company would embrace – whether environmental, social, or governance related…
Teymoor Nabili
Let me pause you there for a moment because you said “communicating less”. So I guess we need to make clear what this survey did. What you have done is judge Asian corporate engagement through the metric of how much they use social media to talk about it. Is that right?
David Hoffman
Yeah, that’s right. It’s one data point, among many. I mean, I think if you look at the good work that many of the rating agencies are doing, where they are scoring companies on their ESG performance and so forth, there are many indicators in this space. And basically across the board, and with some important exceptions, Asian public companies are underperforming against global benchmarks. I should say, though, that many global firms aren’t performing up to the standards that are quickly being demanded, by certainly the investment community and all their green investing reorientations. And we think soon to follow, consumers.
Teymoor Nabili
So why is the amount that companies are tweeting, and you focus specifically on Twitter and Instagram, and how much people are liking and sharing social media… Why are those metrics necessarily the ones that you chose? And how do they reflect company activity and attitude?
David Hoffman
So the basic thesis of this study, the Asia Corporate Purpose Monitor, is to understand the trends in public discourse across corporate purpose and ESG-related topics. What are companies communicating about? What and how is their audience engaging? And what topics is the public interested in, as measured by their search activity? So what we’re trying to do here is establish what the public cares about in this space. Because if we can establish what they care about and how that’s trending, corporates will take note. Vanguard corporates will figure out areas where maybe the public needs to be educated and proactively do that. And areas where the public is demanding answers and information, we think will trigger appropriate corporate response. I mean, it goes back to that old adage, if your customers want it, and will pay for it, you’ll do it.
Teymoor Nabili
Alright, so you’re measuring public attitudes towards some of these ESG criteria and broader, and then measuring how much companies are including those criteria in their communications output, right?
David Hoffman
Well, that’s right. And the reason we started with corporate tweets and Instagrams was because this is a very pioneering project. We boast that it’s the first of its kind ever anywhere in the world. And we had to start somewhere, and we figured that this was a good place to start. We have big ambitions for how to expand it, incorporating other social media and maybe even traditional media channels to really make this a very deep and comprehensive study. But to all intents and purposes, this was a beachhead report to establish proof of concept. We think we’ve done that. The results are really interesting. And we feel really excited and confident about expanding it from here to include other regions. You know this first report measures corporate purpose ESG discourse across 11 markets in Southeast Asia, including Hong Kong as another regional hub in the region. But we’d like to expand it to the EU and US and do regional comparisons, and so on and so forth. There’s a lot that we can do from here. But this is why we started with the Instagram and Twitter accounts of corporates in first instance.
Teymoor Nabili
So let’s break down the results then. You’ve structured into two parts, as you said – what the public are interested in, and what the companies are talking about. Let’s start with the companies, because from what I saw of your report, fully three quarters of Asia’s local companies, and about two thirds of those regional Asian companies are not really engaging with the ESG agenda. Tell me a little bit about what you’ve found from here and break it down?
David Hoffman
Yeah, well, again, I should qualify this as being their engagement on corporate Twitter and Instagram. And they may very well be engaging through other channels and in many cases they are. So this is a view through one lens. But what we can see is that they’re communicating about these issues less, they’re communicating more narrowly about them, around their sort of corporate sustainability reports, their diversity, equity and inclusion initiatives, and generally staying away from the hard parts of corporate purpose related to climate, energy and environmental sustainability transitions, which obviously is a hard part. And I would say that Western corporates, the ones we measured in the regions are communicating more and across a wider array of topics. But, you know, this is a sensitive area. And I think this is the conversation we wanted to start here. Companies are understandably wary about communicating across the gamut of these issues. Because, point in fact, no one has a perfect ESG performance measures. Everyone’s trying to do important new things, and everyone’s trying to transition out of things that they once did that they see is no longer viable in a future ESG-centric world. So it’s a knife edge in some ways, and that’s where we want this piece of work to lead us. How do we deal with that? And I think this is what the purpose of this beachhead report is, and we’re beginning to start those types of conversations. That’s the outcome we want to lead to. We don’t want to criticize anybody or lay blame, we want the public and the corporate sector to come together on these issues and figure out how to do it better.
Teymoor Nabili
I fully understand your agenda and your aims. And I think they’re laudable. There needs to be greater thought leadership and, in many ways, greater pressure on companies to have the conversations, as you have said. Having said that, let me be cynical for a second here. I don’t want to put words into your mouth or characterize your report. Because you’re absolutely right, a snapshot in time right now is not necessarily representative of where we’re going, or how people are considering these things, particularly in the very focused terms that you got. But having said that, we are also engaging in a lot of very sensitive conversations right now. And the public and companies are becoming more aware that the tendency for greenwashing is very, very strong. And the data, limited though it is in terms of the context that we’ve talked about, does tend to suggest that generic brand promotion is what companies are focusing more on, rather than actually engaging with a concrete and substantive ESG agenda.
David Hoffman
I don’t know if you can derive that from it. But what we do say in the report is that companies clearly aren’t communicating enough on these topics. I mean, the volumes are lower than they reasonably should be. The topic coverage that they’re communicating on is narrower than it arguably should be. In many cases, the materiality, the material issues to companies, for example, greenhouse gas emissions to energy intensive industries, are not as high a focus in their communications as they should be. There are many shortcomings that this report illuminates. We can’t tell from the data why that’s the case. And again, this is only looking at one channel of communications, among many. But the general conclusions, we think, stand – that there’s not enough communications, there certainly isn’t enough on the hard issues. And then if we look at the public search data on the other side – so we’ve got three data series here. We’ve got what companies are communicating on; how their audiences are engaging on it, are they liking it and sharing it as a proxy for engagement. And then, separate from this, we have what corporate purpose related topics the public is searching for. And we can see in the search data, that the interest in emissions in environmental sustainability, in water resources, in biodiversity, is high.
Teymoor Nabili
The report says “research shows there’s a higher public appetite for this kind of information. Clearly, local citizens care about what their local companies are saying on corporate purpose related topics.” So just quantify that, for me. What is the public appetite?
David Hoffman
Well, that was a really interesting finding. So the multinational corporates in the sample are communicating more than the comparative set of local national companies. But the engagement level on those communications is, again, higher, you know, the share of engagement is higher than the share of communications from the company. So that’s positive, the audience is interested and listening. But for the for the local firms involved, they’re communicating less, but the share of audience engagement is higher. So this suggests that local citizens in these various markets and countries are highly interested, we think the data show this, in what their local companies are doing in this regard, they show more interest in these topics when they’re communicated by their local firms than they do hearing it from the international firms in the sample. That’s what we can conclude.
Teymoor Nabili
And that for me was kind of interesting. It’s sort of anomalous, in a way. We began by saying, okay, local companies seem to be lagging international companies in engaging with this material. And we’ve also acknowledged that companies tend to respond to consumer pressure. But here in Asia, we have actual evidence that consumers are engaging, and yet the companies are lagging.
David Hoffman
Better than that, we have evidence that consumers in these countries are interested in what their companies are doing and responding favorably to it when they do communicate. And based on their search data at a local country level, local market level, there’s high interest. So again, we point out that this is an opportunity, that vanguard local companies should seize this opportunity to step up their communications and engagement. That’s the point.
Teymoor Nabili
Okay, let’s break it down into into more specific areas. Are there differences between countries where the public is more or less engaged?
David Hoffman
There are and again, if there’s some really interesting company level data, we showed comparative engagement, we showed comparative communications and search data in the report, but we left out a lot of the more granular analysis in this first beachhead report for a follow-on piece of work, because we thought it would just be a little bit overwhelming if we included it. But the report doesn’t give a lot of explanations for why this should be true. But we find in general that the advanced markets in Asia are more interested in a certain set of topics than the more emerging market countries in Asia. We find that some countries are really tilted towards particular topics. Super interesting. Diversity, equity and inclusion, for example, is astonishingly high in India. But again they’re just little things you see in the data that are remarkably interesting that we think we can go into, in follow-on work that really explore these country level dynamics and characteristics and trends.
Teymoor Nabili
Couple of really interesting ones that just jumped out at me in terms of the markets getting the highest engagement with respect to corporate purpose related comms, is that Sri Lanka has the highest by far – 46% public engagement in Sri Lanka. And here’s the really shocking one. In New Zealand, public engagement you put at 3%!
David Hoffman
Well, you know, it is interesting. And again, if we looked at the specific nature of the communications there, it may be that in a market country like New Zealand, where awareness of ESG issues is very high In general, at least that’s my perception given how pristine and attuned the public seem to be to issues of the sort, they just don’t respond to corporate engagement in the same way. They’re just more used to it, or they expect it.
Teymoor Nabili
It’s sort of taken as normal, business as usual?
David Hoffman
That might be the way I would interpret that. But again, these are all really interesting indicators of areas that are worthy of future study. I mean, what that suggests to me is that companies communicating in a place like New Zealand, where public expectations are relatively sophisticated and high, need to be raising the bar.
Teymoor Nabili
One of the conclusions of the report, let me quote: “The assumptions are that advancing corporate purpose is now the key strategic priority for many C-Suites.” Explain how you derive that conclusion.
David Hoffman
So corporate purpose, we actually use a pretty similar definition as the one that was established by the World Economic Forum several years ago, that corporate purpose is ‘the act of profitable commercial pursuits, that help people and planet or that benefit people and planet and that don’t harm the interests of people and planet.’ And if you think about it that way, it really incorporates everything in the sustainability and good conduct space. So it’s very strategic, it involves a significant redirection or rethink of strategic orientation. I like to think of it as companies needing to bring their corporate superpowers into play, for the benefit of people and planet, whether those are technologies or financial resources or networks or other resources of various sorts, and sort of connect those to the environmental areas that a company can touch to the community development and public welfare areas a company can touch. So it’s very strategic. And this is why it’s different but connected to things like CSR and philanthropy and environmental sustainability. It incorporates all of that, as well as internal processes and values like diversity, equity and inclusion, gender equality, so on and so forth in the workplace, transparency and ethical conduct. So it’s something that a CEO, a C-Suite really needs to get their head around, it’s not easy. And it’s especially not easy in a region as diverse and complex and uneven as Asia. And that is the purpose, writ large, of our Asia corporate leadership council, the one we’ve established, in first instance, here in Singapore, to focus on how to actually do that. It’s not easy, it’s not easy at all. It’s costly, it needs to produce good cost/benefit for it to be sustainable for a company. It’s tricky. And it takes a lot of hard work.
Teymoor Nabili
In a way, it’s not exactly shocking but a little bit surprising that, as you say, this is the first time that anyone has taken this particular approach to bringing up these conversations and I’m glad that you’re doing so. And I hope it becomes the norm. I mean, the Conference Board itself, even the idea of the organization is to help members ie companies that are part of your organization to look forward and derive insights and modify their behavior according to the requirements and the corporate leadership council, I’m interested to see where you plan on going with that. I mean, thus far. what’s the response been to this agenda that you’re setting up? We started off saying Asian companies may be a little bit slower than others. But are you finding an appetite in the corporate leadership council to hold these conversations?
David Hoffman
Absolutely. In fact, we decided to set it up here in Singapore in first instance because we see the conversations happening here. I would say even more so than I have seen happening elsewhere in many respects. You’ve got a high concentration of business leaders, you’ve got a switched-on government, you’ve got dire environmental pressures where if these climate issues aren’t addressed Singapore will have big problems in the future. And most of Southeast Asia as well. So we sort of foresaw that things like the Green Plan 2030, and the Emerging Stronger Taskforce would form here, and we think Singapore actually has a chance to move the needle here. So it’s a good place for these tough conversations. And they are definitely happening within our council. And unlike most councils we have, where executives come and learn from one another and us, and take those learnings back and apply them internally, this council has a real bias for action. And one aspect of that is producing research like this report that we can project externally and trigger the conversations that are needed and provide data points and information and insights to companies so that they can follow. And we have other things like case studies and other materials that we’re making available to the broader business community so that they can learn from this council and that we can move the needle on these issues.
Teymoor Nabili
You’ve mentioned already a little bit more about where you think this particular direction, this particular initiative is going to go. But just expand a little bit more on how we can make it more of an issue. In Singapore, there’s the conversations being held, there’s an appetite. How do we expand that? How do you plan to take these into the other Asian nations and into the other Asian boardrooms?
David Hoffman
That’s work in progress. But, you know, we pick these 11 markets in Southeast Asia, places like Sri Lanka and others that tend not to get as much public attention. We put a press release out on this report and the media that picked it up across the region, these outlets that I had never heard of in places like Sri Lanka, matter. This study, one of the interesting things about it is that we work with a partner Quilt AI, an AI-based big data company here in Singapore, and all of this was picked up mostly or most of it was picked up in local language. So we scoured Instagram and tweets, in Sri Lankan and other languages, and it really does reflect at least in its narrow scope, what companies and the public are thinking and doing. So for some of these ASEAN countries, it’s really a first look at the state of public discourse. It’s a view we’ve never had before. To first answer your question, one of the first steps is trying to figure out what the current picture is. And this gives us at least a first view and and the council and its government interlocutors and other institutional relationships here in Singapore and elsewhere, we’ll sort of figure out how we project that externally.
Teymoor Nabili
Well, I wish you luck, David, and I look forward to catching up with you as more of this information and more of this research is made public and let’s see how it grows.
David Hoffman
Well, we’re really excited about it, and hopeful we can have some positive impact.
