Throughout much of 2023, the Federal Reserve’s hawkish stance on interest rates cemented an economic shift from the low-interest era of the 2010s to the new normal of “higher for longer” rates of the 2020s. Other central banks from major economies have followed suit. Corporate and financial communications during these economic transitions present significant challenges across various verticals, regions, and among executives at all levels.
Despite high-profile layoffs in tech and media, high mortgage rates, and tumultuous market events, the highly predicted, rate-influenced recession has not emerged in the United States, yet. Instead, it has been a year of transition – sectors associated with growth such as crypto, metaverse, and media streaming have retrenched, while sectors, particularly those in energy transition, infrastructure (physical and technological), and manufacturing, have seen fiscal stimulus and increased capital interest.
Given these economic changes, Cognito is focusing on several key trends emerging from this transition across the global economy. As we look at the new year, we’re highly focused on which issues which present communications challenges as well as opportunities in 2024:
The Energy Transition and Re-industrialization
Increasing U.S. production of both traditional and renewable energy sources, coupled with the reshoring of manufacturing in the U.S. and allied countries is driving significant economic activity. It’s too early to tell what impact the recent fossil fuel transition deal agreed at COP28 will have, but that story will burn well into 2024.
We are helping our clients adapt to the increasing U.S. focus on both traditional and renewable energy sources. As companies articulate their roles in this evolving landscape, we assist in crafting messages that resonate with stakeholders. As my colleague Taylor Fenske writes on ESG: “putting forward a pragmatic message and position along with a robust crisis plan is a must in 2024.”
For our clients who work directly within or service the manufacturing sector, we are aiding companies in communicating the strategic benefits of reshoring. This includes job creation, supply chain resilience, and quality control. We also emphasize the importance of international cooperation and global supply chain diversification.
The growth of private credit as a source for lending and investment.
As private credit rises as a pivotal source of lending and investment, so too has the media’s expanded interest and coverage of the topic. And, as FT Alphaville editor Robin Wigglesworth points out, the surge in private credit stories being pushed by companies.
As global businesses avail themselves of private funding, M&A deals are completed using private leverage, and investors contribute to new private debt funds – transparency on this issue builds trust and confidence within markets.
Cognito’s ability to work with investors, lenders and businesses utilizing private credit allows us to see how this space is emerging to fill the capitalization needs of a global economy – even as rates persist higher for longer.
Continued importance of crisis communications
With polarization remaining high both abroad and around the globe, we’re highly attuned to the fact that economic transitions can lead to unforeseen crises. Higher rates, regulatory issues, geopolitical conflicts and political polarization in a year of elections create a variety of known and unknown risks. Reporters are also attuned to the greater likelihood of unforeseen and unintended moments during uncertain times. This all puts a greater emphasis on crisis preparedness.
Cognito’s global insights and strategic counsel help clients anticipate and navigate these challenges, ensuring the minimization of damage and the maintenance of stakeholder trust. This approach to crisis management is designed to reinforce investor confidence, especially during periods of uncertainty, by effectively communicating financial stability and business prospects.
In an ever-evolving economic landscape, Cognito’s role as a global specialist PR agency is an increasingly significant advantage for our clients. From supporting shifts in energy production and manufacturing reshoring to managing private credit complexities and crisis situations, the right communications strategy is vital for a company’s success. We are more than messengers; we are strategic partners in navigating the complex world of corporate and financial communications.
Doug Hesney is a Senior Vice President and Head of Financial Communications at Cognito’s New York office