If data is king, story is emperor

By Matt Peacock, Senior Partner

How do I love thee? Let me count the ways. I love thee to the depth and breadth and height of =SUM(A2:A17), so that’s 177.84 with rounding to two decimal places. If you want to tell someone you love them, a spreadsheet isn’t the best medium (as I’m sure Elizabeth Barrett Browning would agree). Numbers help us make sense of the world around us, but you need words to make it sing.

When I first encountered corporate sustainability reporting in the late 1990s, there were quite a lot of words and pictures, and very few numbers. Writing a sustainability report was a lonely task on the outer margins of corporate life. Senior management attention was limited to scrutiny of the messianic declarations of good intent drafted on behalf of the Chief Executive, and the case studies. Data disclosure was elective and selective, and the large majority of investors, customers and other stakeholders appeared to be uninterested in the output. It felt like an annual rite of vapidity, dissipating upon contact with the real world like a rare trace element released into the atmosphere.

That era is over. Years of public and political mistrust of the corporate world has led to ever-increasing statutory sustainability disclosure obligations, and there are even more stringent rules just over the horizon (which we’ve previously written about here) mandating sustainability reporting on a truly vast scale. In theory, greater transparency leads to greater accountability which in turn moderates corporate strategy and behaviour to good effect. But reality is much messier than that. There are two problems.

The first relates to the people who lead the work: the corporate sustainability teams. The best have a priestly zeal, at their most energised when seeking to persuade the companies they work for of the need to take action for the benefit of people and planet (and, ultimately, the company itself). They will now be enchained within an annual statutory and voluntary reporting cycle more demanding and complex than any financial reporting framework. Exhausting, perpetual rounds of inward-facing data scrutiny, with very little space to step back, seek out external perspectives and educate and challenge senior management teams.

The second problem is one that’s familiar to people who work in security and intelligence: volume can be the enemy of the good as the meaningful drowns in a sea of the meaningless. The new EU regulations cover every aspect of corporate environmental and societal risk management across the entire global chain. The statutory filings involved will be enormous. Only the most well-resourced institutional investor, regulator or NGO will avoid feeling overwhelmed.

There’s also a serious challenge for corporate communicators and brand and marketing teams. Few consumers would choose one brand over another because of an 11 percentage point difference between parent companies’ reported Scope 3 emissions. Data can provide evidence of a commitment to avoid harm and do good. But data, alone, will not inspire affection and affinity, excite and motivate employees or stimulate the emergence of loyal and engaged customer communities on social media. You need great corporate narrative to achieve all that. Simply expressed, memorable, emotionally engaging, always grounded in hard data but that rises far beyond the prosaic explanations required to put data into context.

Storytelling - creative, provocative, harnessing the unusual and the unexpected to gain and hold attention – will be just as important as analytics in the new sustainability data-driven corporate world. And these stories will matter; full of highly salient information that will directly shape stakeholder sentiment, unlike the flimsy Potemkin sustainability brochures of the old era that were designed to communicate the immaterial to the indifferent.

There’s another factor to consider. All too often, companies consider the analysis and disclosure of sustainability-related risks to asset values (their ESG reporting) as wholly separate to the articulation of their mission to create value by meeting vital human and planetary needs (their corporate Purpose). As we’ve explained previously, ESG and Purpose are a single continuum (hence our focus at Blurred on “ESGP”). Nothing erodes reputation faster in a hyperconnected world than blatant corporate inauthenticity. A serious disconnect between a company’s publicly stated Purpose ambitions and its tricky ESG realities – what we call the “Impact Gap” – can destroy value.

How can companies get it right? Understand what your sustainability data tells you about corporate harms and positive impacts. Understand your own Impact Gap (and if you don’t, talk to us: our research covers hundreds of firms). And do not allow your actions to address material sustainability risks to become the backbone of your corporate narrative. A company is so much more than the sum of its mitigated ills.

At Blurred, we think of ourselves as corporate communicators and creatives who understand and use deep ESG data to inform our work – not as ESG data analysts who understand the importance of corporate communications and creativity. Reliance on poor quality data will fatally undermine a corporate narrative over time. But even the most robustly analysed datasets should be no more than a starting point when the company considers how best to explain what it is, and why it exists.

If data is king, story is emperor. And it is the storyteller’s craft that makes the difference between a company that is tolerated – and a company that is loved.