ESG: PR or Societal Play?
By Eve Tahmincioglu

There’s something I’ve come to expect as a business journalist. Whenever you share positive news about a company, it’s often an invitation for critics to point out the not-so-positive.

So, I wasn’t shocked when I received an email following the publication of an interview I did with Western Union CEO Hikmet Ersek about the company’s first ESG (environmental, social and governance) report, saying:

“I was surprised to see Hikmet Ersek, CEO of Western Union, describe his company as operating to the ‘highest ethical standards.’”

The email came from Mark Farmaner, director of Burma Campaign UK, an NGO based in London with a mission to restore human rights and democracy in Burma. “In Myanmar,” he points out, “Western Union uses Myawaddy Bank, owned by the Myanmar military, as one of its agents. The United Nations’ fact-finding mission on Myanmar has accused the Myanmar military of genocide against the Rohingya Muslim minority. They have called for sanctions of Myanmar military companies, stating that doing business with them is indefensible.”

I did some digging, and indeed the U.N. had made the recommendation. I reached out to Western Union’s PR folks, asking “Is Ersek aware of Myawaddy Bank’s affiliation and are there plans to stop doing business with the bank? How does continuing to work with the bank align with Western Union’s ESG mission?”

A spokeswoman said in an email that the company “condemns human rights abuses,” and that “All agents selected to offer our services to the people of Myanmar undergo rigorous due diligence and they are an important conduit to making remittance accessible to the people of Myanmar. We take concerns about our agents seriously and as noted in our ESG report, will continue to engage with our stakeholders around this and other issues of shared concern.”

Since she didn’t quite answer my question directly, I followed up by asking: “So just to clarify, you’re saying Western Union is still using Myawaddy Bank, which is owned by the Myanmar military?”

Her response: “We take all information received from outside parties very seriously and we are reviewing this matter accordingly. We will inform all of our stakeholders on the outcomes of our discussions as soon as practicable.”

There’s a deep fear among many, including me, that the ESG push is going to end up more a PR play than a good-for-society play. The Business Roundtable’s recent “purpose” proclamation to focus on all stakeholders — including employees, suppliers and customers — not just shareholders, for example, has been seen by many as a feel-good publicity stunt.

Clearly, ESG has to be more than that, something that Western Union’s Ersek knows all too well, as he told me about publishing the company’s first ESG report: “Once you go to the public — promise it — you have to execute it. We have to keep up our values, measure it, and present it to the board.”

 


Issue: 
2019 Fourth Quarter

Other related articles

  • Driving a Focus on Risk
    Published February 19, 2020
    By Eve Tahmincioglu
    Risk mania has taken over the corporate governance discussion today but defining risk and figuring out how to deal with it can be dizzying for boardsDinesh Paliwal the chief executive officer of Harma ...
  • The Character of the Corporation: 10 ways to get started on your ESG journey
    Published February 19, 2020
    By Robert H. Rock
    America is experiencing record growth which has provided abundant jobs wage growth and wealth generation for a majority of Americans Yet income inequality and wealth disparity are alarmingly high brin ...
  • The Character of the Corporation: A deep dive into our forum’s biggest questions
    Published February 19, 2020
    By Eve Tahmincioglu and David Shaw
    As most board members know environmental social and governance issues ESG are all the rage with institutional investors putting pressure on public companies to think beyond maximizing value for shareh ...
  • Human Capital Governance: The beginning of a new era.
    Published February 19, 2020
    By Don Delves, Amy DeVyler Levanat and John Bremen
    The era of human capital has arrived in the boardroom and with it the need for more thorough board oversight and governance of this missioncritical investmentAs evidence consider three current paradig ...