As companies and shareholders increasingly prioritize diversity and inclusion efforts, many are turning to diversity audits to evaluate their progress.

However, our recent research suggests that these audits may not have the positive media impact that communicators might hope for.

Independent reviews of diversity and inclusion efforts have led to zero media reputation gains for the companies we track in our media Benchmark. In fact, controversy and skepticism surrounding the process of conducting such audits has meant coverage is neutral at best, and sometimes even negative.

The main contributor to negative sentiment was coverage of how the decision to conduct an audit was reached. Voluntary diversity audits were often framed as a reluctant reaction to pressure from shareholders, with plenty of commentary around companies’ initial pushback to the idea. Also, coverage often mentioned existing allegations of discrimination to explain shareholder demands for audits. This context undercut the potential reputational gains for diversity audit stories.

Another reason for the lukewarm coverage is that the auditing process is vulnerable to being portrayed as performative or insufficient. For example, the qualifications or independence of external auditors were often questioned in media coverage. Alternatively, if a company conducted an internal audit, media coverage suggested that the audit was biased or lacking in transparency. Issues related to the sufficiency, independence and transparency of audits together accounted for 24% of negative messages.

The recent politicization of corporate DEI initiatives also plays a role. The media will publish the ‘anti-woke’ rhetoric of shareholders who take issue with companies choosing to perform a diversity audit. This results in unwanted controversy – whether the articles in question are written in support of such views or not.

When diversity audits materialize, communicators should be prepared for the media to broadcast shareholder views. Whether these shareholders are for or against diversity audits, their comments are likely to be critical of the company, undermining any potential reputational gains.

In theory, showcasing the progress of diversity audits should be a great PR tool to demonstrate action and commitment to an important issue. However, in practice, results are neutral at best. While the media continues to frame these stories from the viewpoint of critical shareholders, communicators should minimize proactive messaging about audits, and look elsewhere for stories that can more effectively communicate their brands’ DEI values.

It appears that ESG is retreating from business. Support for ESG-related corporate shareholder resolutions is declining. Finance firms like BlackRock and Vanguard have walked back some of their ESG initiatives in the face of conservative scrutiny.

Do these developments signal the end of ESG? The stakes are high for communicators, who will be responsible for sharing – or downplaying – their organization’s values and initiatives with the marketplace.

PublicRelay sought to answer this question by examining over a year’s worth of ESG media coverage across seven sectors. Here’s what we found:

ESG as a concept is on the decline

ESG as an overall concept is becoming a smaller part of the news cycle. Corporate news is increasing around 5% quarter over quarter. But stories mentioning ESG as a singular entity are decreasing 7% each quarter.

Corporate governance is maintaining its importance amid economic uncertainty

That doesn’t mean that the attributes that make up ESG are becoming any less important. Furthermore, not all components of E, S, and G are performing equally. Much of the decrease in ESG stories is attributed to the decline in social topics. That includes themes like inclusivity and community impact.

But governance stories have maintained their lead in the ESG media mix. They’re even increasing in 2023. This is in large part due to growing economic uncertainty. As the news cycle focuses on business performance, issues like corporate ethics, overhead, and board decisions are in the spotlight.

Environmental stories are rare but can pose risks for several sectors

Stories about company environmental initiatives are rare compared to those about corporate governance. Environment mentions tend to be 15-20% of overall corporate ESG coverage, quarter over quarter.

But companies’ impact on the environment shouldn’t be ignored. The energy sector is receiving backlash to their doubling down on fossil fuel investments. Finance firms face criticism from climate advocates for walking back sustainable investing pledges. In the future, the energy required to power new AI technologies could put Big Tech in the crosshairs of the environment media discussion.

A healthy workplace will matter for business competitiveness

Promoting an engaged and inclusive workplace is still paramount, even with the decline in news about social-related topics. 2023 saw companies face layoffs, return-to-office policies, demands from organized labor, and a new wave of AI tools that may affect the future of work.

Navigating these challenges will require precise communications strategies, both internally and externally. Retaining top talent may have added significance in a news cycle focused on business performance.

ESG isn’t dead, but it’s branding might be

The environmental, social, and governance reputations of a company are still important. Yet how does that square with the growing scrutiny towards ESG?

Our analysis revealed that companies face the most criticism when they play up ESG as an end in itself. Backlash tends to occur when company ESG efforts feel overly political or unrelated to their bottom-line.

In fact, coverage that used “ESG” as a noun generated more criticism than when the media used “ESG” as an adjective. Noun uses of ESG seemed vague. They invited suspicion from anti-ESG advocates that companies were becoming overly political.

Companies that used the ESG term to describe specific actions received more positivity. The best results occurred when they referred to the constituent parts of ESG, like ‘environmental efforts’ or ‘governance initiatives’.

Dropping ESG as a term is also a no-cost option. In response to the prior year’s backlash, BlackRock CEO Larry Fink avoided the ESG term in his 2023 annual shareholder letter. Fink maintained BlackRock’s commitment to sustainable investing. But the media sentiment towards BlackRock became positive after dropping the term.

Navigating ESG’s future

The core issues that fall into the ESG category are still relevant for corporate communicators. Companies will need to showcase their good governance values and sound environmental footprint. They will need to demonstrate engaged employees and happy customers.

Yet the way those issues are communicated will likely change. With growing attention to corporate governance, companies will benefit by tying ESG-related efforts to their performance and bottom-lines. Communicators might consider avoiding the ‘ESG’ term entirely and instead emphasize specific environmental, social, or governance initiatives. That can help them reach their core audiences while avoiding the media storm around ESG.

The COP28 Climate Change conference in Dubai is rapidly approaching and already making headlines. The media buzz is especially focused on the energy sector, who will now have a seat at the UN negotiating table.

Energy companies have opportunities to proactively shape their media reputation ahead of the conference. But that attention may bring new challenges and risks. So it’s important for energy communicators to be prepared for potential criticisms they may face.

To surface these risks, PublicRelay examined the media landscape for energy companies ahead of COP28. We drew on a sample of top stories in September and October 2023 about the conference.

Here are five PR risks energy communicators must prepare for ahead of COP28:

1. Watch out for concerns about competing interests

Climate advocates are skeptical of oil & gas’s involvement in COP28. Al Gore recently slammed the conference’s appointment of Sultan al-Jaber, the CEO of the Abu Dhabi National Oil Company, as COP28 president.

Wider oil & gas involvement may fuel fears that the sector is attempting to capture and obstruct global climate progress. That was the most prevalent and wide-reaching concern in the media. Some activists went so far as to demand boycotts of the conference.

2. Anticipate scrutiny about the scope of climate pledges

Companies like Shell and TotalEnergies have rallied around a Global Decarbonization Alliance in the oil & gas sector. Championed by the COP28 president, this alliance commits reducing emissions from oil extraction. It also aims to reduce methane emissions and oil leaks.

Energy companies should expect criticism about the scope of those commitments. Critics highlight that they miss scope 2 and 3 emissions where the energy sector’s impact is greatest.

3. Be ready to defend future energy solutions

Climate advocates will likely be skeptical of new investments in new energy solutions. These range from carbon capture technologies to development of hydrogen fuel.

Some claim that carbon capture approaches are untested and unscalable. Some call out hydrogen development as simply re-entrenching reliance on fossil fuel.

4. Expect demands for financial commitments

Climate finance will be among the leading topics at COP28. Climate leaders are hoping to mobilize capital toward new climate-friendly infrastructure.

But some policymakers are also calling for prices on carbon, windfall taxes on energy profits, and a rollback of fuel subsidies worldwide. Energy companies may even be expected to arrive at COP28 with innovative approaches to carbon credits and pricing.

5. Manage perceptions from climate academics

Environmental activists are the biggest critics of energy companies. They speak loud and often.

Yet climate academics may be a bigger PR risk. They don’t criticize energy companies regularly. But when they do they receive higher engagement on average. Academics may be seen as more objective and credible to a wider audience.

PR is in the spotlight

The stakes are high for energy communicators. Climate leaders will watch energy companies closely. Climate advocates may be quick to label the energy sector’s involvement in COP28 as nothing more than a greenwashing stunt.

Energy communicators must emphasize their genuine commitment to climate solutions. Make clear that oil & gas pledges may just be a first step in a larger green transition. Be prepared to showcase tangible investments in new and viable energy solutions. Offer support to innovative financing arrangements to position yourself as a forward-looking business.

Platforming third-party support is also necessary. Engage credible experts that can objectively support the energy sector’s efforts. Play up support from climate leaders like US climate envoy John Kerry and the Environmental Defense Fund’s Amanda Leland. Those influencers may be more hopeful that energy’s presence at COP28 can move climate progress forward.

This year’s COP28 Climate Change Conference in Dubai is going to make headlines. Unlike prior years, global energy companies will have a seat at the negotiating table. With no less than the future of UN climate change policy up for debate, the stakes are high for energy communicators.

The energy sector’s involvement at the conference presents reputational challenges and opportunities. So it’s crucial for energy communicators to proactively shape their media reputation.  

PublicRelay sought to understand the media landscape for energy companies ahead of COP28. We analyzed a sample of top stories in September and October 2023 about the conference. We also focused on the media’s coverage of major energy companies around COP28.

Here are five PR strategies for energy communicators ahead of COP28:

1. Seize the Spotlight on Energy Solutions

The COP28 news cycle will undoubtedly revolve around energy solutions. Energy-focused articles were most prevalent and mostly positive. They also had among the highest reach and social engagement.

Emphasize your company’s innovations in new energy areas. Positive energy stories focused on the development of renewables like solar and wind. They also discussed the growth of new technologies like carbon capture and hydrogen. 

2. Embrace Climate Finance

While energy solutions led the media conversation, climate finance generated just as much social engagement.

Position your company as a leader in financing the transition to a greener future. Highlight investments in new energy solutions. Play up support for innovative approaches to carbon credits and taxation. This will reinforce your image as a forward-thinking business.

3. Capitalize on the Intersection of Climate and Global Health

Global health is an emerging topic in the climate conversation. It didn’t appear often in the COP28 news cycle, but coverage was entirely positive and widely amplified.

Showcase your contributions to global health through environmentally sustainable practices and products. This approach will likely be well received. It may also garner high syndication and sharing.

4. Support Oil & Gas’s Climate Commitments

Oil companies involved in COP28 have an opportunity to take on a greater role in climate action. Early media signals of the oil & gas sector’s climate commitments were positive.

Third-party climate influencers called for energy companies to lead on climate change. Some were optimistic about initiatives like the Global Decarbonization Alliance championed by COP28 president Sultan al-Jaber.

5. Frame your Climate Action as a Transition

Position energy decarbonization as a crucial first step in a just energy transition. Global demand for energy is increasing. But tangible actions by the energy sector can help mitigate the effect of emissions.

Sector-wide initiatives that were viewed positively included reducing methane from oil extraction. Preventing oil flares and leaks also had positive pick-up. These messages may resonate with the public. They can reinforce the sector’s role in meeting global energy demand responsibly.

Managing Risks

Remember that addressing media scrutiny is important. Communicators should prepare to transparently respond to criticism at COP28. Expect accusations of energy companies co-opting global climate negotiations. Have a strategy to manage potential activist calls for boycotts of the conference.

Furthermore, acknowledge the scope of your emission reductions strategy. That’s especially when it comes to scope 2 and 3 emissions. Be ready to engage with politicians’ calls for taxes on energy profits. Highlight your commitments to invest in clean energy innovation worldwide.

COP28 is an opportunity for energy companies to reposition themselves as leaders in the global transition to a sustainable energy future.

Energy communicators must capitalize on emerging positive narratives and address challenges head-on. This can help their companies shine at COP28 and beyond.