Introduction
This guidebook supports companies and their boards as they articulate a clear position around relevant environmental, social, and governance issues that take into account the context in which that company operates. This guide has benefitted from the involvement and review of our partner companies and draws on a systematic review of over 3,200 position statements from global companies along with more than 200 interviews with CEOs, directors, and board chairs. It builds on concepts we outline in our series of resources on the Road to Context.
While this guide offers guidelines for the content and structure of position statements, we are also developing companion guides that offer more specific guidance on particular issues such as the development of climate position statements.
What is context and why does it matter?
While many companies now acknowledge that environmental and social factors have an impact on their strategy, a shift to 'triple bottom line' thinking has only taken them so far - too often framing key strategic choices as trade-offs. Our research reveals that an increasing number of companies have come to see their operations as part of an embedded economy in which their strategies are bounded by the social and environmental systems that surround them - reflecting a shift towards what is starting to be called 'contextual' thinking or 'acknowledging context'.
Already, hundreds of companies have set science-based climate goals1 committing to do their part to limit global warming to well below 2°C above pre-industrial levels. Our Road to Context casebook profiles more than fifty global companies that have made similar contextual commitments on a range of relevant social and environmental issues such as water, human rights, financial inclusion, and community resilience.
Why position statements?
In the past, it has been common for companies to issue broad positions on environmental management, sustainability, or corporate responsibility that address multiple (and often overlapping) environmental, social, and governance (ESG) issues. Too often, the result has been lengthy documents that fail to make a clear strategic connection between specific issues and their implications for business decision-making.
Yet, as stakeholder expectations for corporate social and environmental responsibility expand and intensify, companies are under increasing pressure to clearly convey their position on a range of important ESG issues, including specifically addressing the company's understanding of the context in which it operates and clarifying its role and commitments to address these challenges.
While it is not necessary for companies to develop position statements on every issue, they may benefit from doing so for several key issues. For instance, there is mounting pressure for companies to clearly articulate their position on climate change. Of the 3,200 position statements we reviewed, over 2,000 were climate position statements.
In our conversations with leading directors, we heard that by developing more contextual position statements focused on specific issues, boards and executive teams can deepen their understanding of these issues, clarify how they link to the company's overall strategy, clarify their position for other key stakeholders, and provide the direction and confidence for management and employees to act. Our conversations also surfaced multiple requests for better guidance on how to develop a comprehensive yet concise position statement.
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