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Nneoma Njoku got her first look at the nuts and bolts of corporate governance at a young age, accompanying her father, a hospitality entrepreneur, to board meetings in Nigeria.
“What I love about him is that he has an innate ability to see things from all perspectives, like a bird’s-eye view,” she told Global Atlanta, explaining that while living in Nigeria from 8 to 16, her dad instilled in her a wealth of knowledge about staying alert, flexible and humble in business.
Now, Ms. Njoku makes her living helping companies train critical eyes on their own operations and communicate what they see to investors and stakeholders in a way that’s easy to comprehend.
As general manager of Labrador U.S., a France-based communications agency with U.S. headquarters in Atlanta, she helps public firms embrace transparency as a competitive advantage, turning on its head the perception that corporate compliance is drudgery that distracts from the bottom line.
Companies have long reported their ESG activities (environmental, social and governance) as part of their public- and investor-relations outreach, but especially in Europe, the trend is moving toward mandating and standardizing such moves as part of their disclosures.
France, which Ms. Njoku estimates is six or seven years ahead of the U.S. on ESG compliance, is joining other European Union nations in requiring a clearer picture of how their investments will affect the environment. Taking effect in March 2021, the EU’s Sustainable Finance Disclosure Regulation forced investment funds to report on the sustainability risks and adverse impacts of their investment products. The EU Commission has also adopted the Taxonomy Climate Delegated Act, a measure requiring companies of 500-plus employees to report ESG information.
“If you watch what is happening in the EU, this may ultimately pave the path in the U.S.,” Ms. Njoku said.
While it has moved more slowly, the U.S. Securities and Exchange Commission has flirted with the idea of instituting some sort of standardization for ESG reporting and issuing guidance on compliance, Ms. Njoku says.
But even if it doesn’t come to that, pressures exist from the investor and consumer sides already, and companies prepared in advance will benefit in other ways.
“It’s no longer enough to just say you are a sustainable company or to have a statement about diversity and inclusion in the workplace. Stakeholders are looking for proof,” Ms. Njoku says. “With all the climate change and social issues we’ve faced in the past few years, stakeholders are now really looking at ESG to better assess how companies are handling risk.”
Investors, both individual and institutional, will see a company with clear ESG reports as better managed, which can inspire confidence. This makes it all the more urgent for companies to make proxies and other filings readable, rather than obfuscating (unintentionally or not) with huge blocks of financial jargon.
An expert on corporate consolidations, Ms. Njoku and her staff of 21 in the U.S. (10 in Atlanta) draw on the expertise of 120 specialists across Labrador’s global operations to fight this problem with “information design,”a process of cutting out what’s nonessential and using visualizations where possible to tell digestible stories.
Executives must now understand, she said, that ESG reporting is an essential issue that can no longer be siloed in the communications arm of the company. It should be addressed in the C-suite, and clarity should cut across all departments.
That’s partly because a new generation of employees is looking at a corporation’s track record on issues like diversity and inclusion or environmental stewardship when they decide where they want to go to work. With a labor crunch in full swing, ESG commitments become a recruitment tool. And human capital management is one category, along with climate change, that is primed for more regulation anyway.
“There’s an expectation that these companies will also be good stewards of our communities and environments. The older generation just assumed that, but there wasn’t as much of a focus on it. Now, with everything that has transpired in the past couple of years, people are very aware of key issues, and they are expecting companies to step up.”
To get started, companies should own and share what they’re doing, even if it’s baby steps so far. But they should do it authentically and in line with their brand and actual achievements.
“We see a lot of companies that are hesitant to put this information out because they don’t feel like they have any real traction yet. At this point, they don’t need it; they just need to show that they are committed to this and they have a plan to get there.”
Labrador, named after the loyal breed of retriever, is now in its sixth year putting lessons learned in Europe to work in the United States.
Ms. Njoku joined in November from Citizens M&A Advisory, where she oversaw marketing and communications. Before that, she was vice president and corporate/B2B practice lead at MSL Group. Now she’s managing a team that is largely working remotely but is ready to get on a plane Hartsfield-Jackson Atlanta International Airport at a moment’s notice to meet with clients face-to-face.
She has had to learn some cultural cues, including the formality of the French and their “brutally honest” commentary, both in interpersonal relationships and in calling out companies that aren’t being transparent. Even if less direct, this passion for transparency permeates the Atlanta office as well.
“We live, eat and breathe transparency and push our clients to be transparent in their disclosure documents because it’s to their advantage.”