Understanding ESG risks

The internet era enables the public, including employees, to quickly register objections to poor ESG management through means like online document leaks and "citizen witness" videos. This is significant because it introduces new risks for organisations that fail to address unethical practices, potentially impacting their business value. Online testimonies, such as videos of police misconduct in cases like George Floyd and Sarah Everard, as well as the #blacklivesmatter and #metoo protest movements have led to profound changes in government and corporate engagement with citizen concerns, driving reform efforts in response to public outcry.

Younger employees are increasingly favouring "leaking" as a means to address ethical misconduct problems, as opposed to traditional whistleblowing channels. The chapter describes this shift as "leaking is the new whistleblowing."

Unilever introduced a "social purpose and sustainability" program and asked brand management teams, including Hellman's Mayonnaise, to contribute ideas to support this effort. The brand managers of Hellman's Mayonnaise framed mayonnaise as socially purposeful, but this was met with criticism as some saw it as misguided. Critics pointed out that Hellman's Mayonnaise had existed for a long time with a well-understood purpose – to flavour salads and sandwiches. Some felt that Unilever was overly focused on sustainability at the expense of core business fundamentals.

Emmanuel Faber, the former CEO of Danone had tried to make Danone a purpose-driven company by introducing initiatives like the "Carbon Adjusted Earnings Per Share" indicator and embracing a broader range of stakeholder interests. Despite his efforts, profit-oriented shareholders resisted his initiatives, and he was eventually removed from the board, indicating that his purpose-driven approach faced challenges from those prioritising financial gains.