ESG removal a big McStake for McDonald's sustainability credibility

In the face of criticism from politicians and consumers amid accusations of greenwashing, McDonald’s has decided to steer clear of the term ‘ESG’. Web pages that were once titled “ESG Approach & Progress” were changed to “Our Approach & Progress”, while “Performance & ESG Reporting” is now “Goal Performance & Reporting”.

Although out of sight, environmental, social and governance issues are very much front of mind. But ESG was, even very recently, a key focus in McDonald’s corporate comms strategy. So why hide it?

The constant use of the term means ESG is not always pictured as positively as it used to be.

What was once praised as a positive step in the right direction for companies has become highly contentious. Just talking about ESG today can leave a company vulnerable to accusations of greenwashing.

The effects of this are starting to be felt within corporate comms, as just 15 per cent (74) of S&P 500 companies mentioned ESG during their most recent corporate conference calls.

When it comes to ESG, it can sometimes feel like companies can do no right. Businesses that are seen as putting out more press releases than action in their ESG strategies will be accused of greenwashing, and there’s no quicker way to lose the trust of customers than to mislead them.

But burying the term isn’t the answer, as all stakeholders need to be kept in the loop.

Investors need to know about ESG commitments because it is a major business risk, while consumers and employees prioritise ESG because it reflects the values of the business.

Silence about the issue creates a huge disconnect and sends the message that those values across the board are misaligned.

Companies need to understand how to be relevant to their audiences. Taking a more strategic and nuanced approach to ESG – for example, by being fully transparent about how actions align with words – has helped companies like Patagonia to win the faith of their customers and boost their valuation. Having a plan for potential blowback will also help companies to stand firm, rather than turning tail at the first sign of turbulence.

Stakeholders are placing business values under the microscope. Rather than burying any mentions of them, those that take an honest and transparent approach to ESG comms and strategy should shout about it.

Myles Peacock is chief executive of Investis Digital