Climate Change and Corporate Reputation in CSR

Are Your Sustainability Claims Putting Your Company at Legal Risk? Recent research reveals a startling shift: Corporate sustainability commitments, once primarily a reputational concern, are increasingly becoming grounds for litigation. A comprehensive analysis published in Harvard Business Review highlights how the landscape of environmental, social, and governance (ESG) communication is fundamentally changing. The data is compelling: With over 2,500 active climate litigation cases globally, companies face unprecedented scrutiny not just for their environmental impact, but for how they communicate their sustainability efforts. The research points to a critical emerging pattern in corporate liability. A pivotal case study illuminates this trend: The 2024 legal action against JBS USA Food Company challenged their "net zero by 2040" commitment. What makes this case particularly significant is that it targeted a voluntary sustainability pledge, questioning not the missed targets, but the viability of the implementation plan itself. The research identifies an emerging corporate response: "greenhushing." Companies are increasingly withdrawing from public sustainability discourse to minimize legal exposure. However, the analysis suggests this strategy carries significant risks: - Market position erosion as competitors maintain transparency - Reduced ability to attract investment and talent - Missed opportunities for industry collaboration - Non-compliance with emerging regulations like the EU's Corporate Sustainability Reporting Directive Evidence-based strategies for risk mitigation: 1. Integration of legal and communications functions in sustainability strategy development, supported by clear governance structures 2. Research-backed implementation plans preceding public commitments 3. Transparent progress reporting: Studies show 80% of stakeholders respond positively to organizations that acknowledge challenges while presenting clear remediation strategies 4. Active policy engagement to help shape the regulatory framework The research conclusively demonstrates that strategic sustainability communication isn't optional - it's a core business imperative. Success depends on balancing transparency with robust risk management protocols. Question for fellow leaders: How is your organization adapting its sustainability communication strategy in response to this evolving legal landscape? #sustainability #leadership #supplychain ___________ 👍🏽 Like this? ♻️ Repost to help someone ✅ Follow me Sheri R. Hinish 🔔 Click my name → Hit the bell → See my posts. ___________ References based on HBR analysis and current market research in corporate sustainability communications.

A few days ago, I discussed how #CSOs are emerging as vital organizational players and trusted advisors to #CEOs. However, it's also essential to understand how they can support their #CMOs in creating differentiated brands and enhancing the organization's overall #reputation.           In a world where brands are increasingly greenwashing, it can be challenging for organizations and their CMOs to define strategies for leveraging authentic sustainability efforts. A 2023 Deloitte survey of 1,015 CMOs suggests a "be, say, do" approach as the key to success.          (Be) Internal Practices First - CSOs are critical in aligning stakeholders on sustainability objectives, benchmarking against peers, identifying performance gaps, and progressing towards ambitious NetZero goals. By connecting excellence in sustainability performance to messaging with certifiable data, CSOs enable CMOs to drive internal sustainability communications that resonate with authenticity and credibility.      (Say) Communicating Company Values Externally – The CSO can work with the CMO to take that internal communication and effectively package it with insights for external stakeholders to tell a compelling sustainability story. Together, they identify the most significant sustainability metrics aligned with the organization's understanding of its customer base and integrate sustainability and digital marketing tools for seamless external communication.      (Do) Developing External Practices Aligned to Values - CSOs collaborate with CMOs to extend sustainability concepts to sales, partners, and suppliers. Initiatives like carbon footprint reduction and waste minimization are done within a partner ecosystem that includes customers and suppliers, yield financial benefits, and contribute to planetary well-being.      Danone is a brand that has successfully implemented sustainable practices in its business operations. Their focus on the importance of food systems and agricultural transformation to tackle climate-related crises is evident.    In 2022, they appointed Henri Bruxelles, a senior leader with a strong background in marketing as CSO to connect value creation with value articulation. Their ambitious climate targets, including methane reduction, water preservation, and regenerative agriculture, are part of their sustainability roadmap, “The Danone Impact Journey.”     They aim to embed sustainability in every aspect of their business to become more resilient, future-fit, and competitive. As a result of their consistent and focused sustainability actions, Danone has achieved a Triple A score for the three environmental areas covered by #CDP: climate change, forest preservation, and water security, making them one of only ten companies to do so.     If you are a CMO, I would love to hear about your aspirations and challenges in building authentic #Sustainability/ #ESG narratives. 

If you’re a CFO and still think climate regulation is just a compliance headache, I’d encourage you to read SB 253 and SB 261 a bit more closely. These two bills won’t just require you to report climate data. They’ll expose how prepared (or not) your company is to handle climate risk — financially, reputationally, and operationally. That has implications for capital markets. Investor relations. Insurance premiums. And future access to public and private funding. Let me make it tangible: → SB 253 will force companies doing business in California to disclose full Scope 1, 2 and 3 emissions. That means mapping your upstream and downstream value chain. Not estimating. Not modeling. Disclosing. → SB 261 demands public disclosure of climate-related financial risks and how your company plans to manage them. Think TCFD-style reporting — but public and enforced. And yet, many companies are still thinking in terms of ESG checklists and one-off materiality assessments. That’s not going to cut it anymore. What’s coming isn’t “more compliance.” It’s a shift in how financial performance and sustainability are tied together. Regulators are accelerating that shift. If I were in your seat, I’d ask two simple questions: Do we have a clear line of sight from raw supply chain data to our financial disclosures? Can we actually prove what we’re reporting? If the answer is no — that’s not a reporting problem. It’s a business readiness problem. The good news? There’s still time to move. But in Q3 and Q4, as budget conversations start ramping up, the cost of not preparing will start to show up on the balance sheet. Because climate risk is now business risk. And this time, it’s not just your CSO’s responsibility to solve it.