By Roy Snell

The Russian and Ukrainian war is impacting ESG professionals. One of my colleagues had a difficult discussion with their CEO about pulling their products and services out of one of the countries involved. Others may have taken it a step further and discussed working with countries that won’t pull out or countries that are actively supporting “the wrong side.” The logic being that you would not want to support a country that is arguably using that support, in part, to commit a humanitarian misstep.

Activists see the decision as black and white. Leadership has to make a business decision. As hard as it is for some to accept, you can drive a company out of business with one or more of these types of decisions. If we stopped doing business with every company that ever did anything wrong, according to someone somewhere, there would be no one to do business with.

A lot of companies got caught off guard when companies started to be targeted by extremists on social media (and Anonymous) for doing business with one of players involved in the war.  They held panicked meetings without all the right people and no process. As companies that “didn’t pull out fast enough” were being taken out by activists on social media… leadership panicked. As Anonymous targeted and started hacking companies that wouldn’t pull out of a country involved in the war fast enough… leadership panicked. An effective ESG program with an effective ESG leader would have planned ahead. You don’t need much, just a few meetings and a policy describing how you will determine if new human rights information coming out of any country anywhere will require a change in suppliers or customers.  A simple list of data that should be considered, a process for considering the data and who should be involved in the process would be very helpful.  You need just enough structure to give people the feeling things are under control, keep people calm, help leadership make an informed decision and in some cases, do it all very quickly.

We can all debate all day long about the scope or role of ESG but what can’t be debated is that we need to have an ESG leader that will work with everyone involved to go through a process to make a rational decision when ESG related issues come up.  We need to move on from the hair on fire crowd to a business process.

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