The events of 2020 have stimulated multiple changes within the corporate landscape, not only in terms of how we do business but also in terms of what business leaders perceive to be important, with Environmental, Social and Governance (ESG) issues being thrust to the forefront of corporate agendas. With a global pandemic placing significant strain on national economies, widespread social unrest over inequality as well as the ongoing impacts of climate change, 2020 has had it all. For companies across industries, new priorities have also emerged from the pandemic. The commercial and social significance of issues such as human capital management or diversity and inclusion has also prompted organisations to question their purpose and revaluate how they conduct their business and direct investment.
This has contributed to the extraordinary rise of ESG considerations which has moved away from being a niche concern to a priority for corporate agendas.
ESG is no longer just the focus for investors and businesses but also meaningful for consumers, particularly Millennials. Today, brands are pressured to behave ethically and project a public image of fairness, transparency and responsibility. Companies are embracing ESG as a business imperative and incorporating this within the wider business strategy to establish a competitive advantage and ensure long-term business success.
But it isn’t just about strategy — stories matter. By elevating, sharing and marketing ESG stories, companies can leverage opportunities to build their brand and enhance corporate reputation.
The way in which that story is communicated is critical. Companies need to move beyond lofty statements and dispel any suspicion that they are simply paying lip service to the notion of ESG.
ESG communications must be authentic, comprehensive, and thoroughly backed by evidence if they are to be effective.
So, what do companies need to deliver effective ESG communications?
1. Have a solid brand narrative
The brand narrative is comprised of the mission statement, vision, purpose, values, and key messages. Connecting your sustainability strategy and goals to brand narrative is key to achieving authenticity and sets the tone for your company’s culture. Goals should be quantifiable and have a set time frame to communicate progress externally.
2. Create a strategic communications framework
Define a comprehensive approach for sharing the ESG narrative and company performance – this includes messaging that will explain clearly to your key stakeholders where and why such principles are relevant to company activities. The framework can organise priorities and initiatives, outline channels, content and serve as the foundation for internal and external messaging.
3. Re-evaluate your communication channels for ESG reporting
Articulating your ESG performance and what you mean by long-term value is not a once-a-year sustainability report, but rather a year-round communication effort. While reports provide stakeholders – predominately investors and analysts a broader view into how the company is delivering and protecting value, financial figures alone no longer tell a company’s whole story.
To help improve ratings and engage with multiple stakeholders including investors, consumers and the media, companies should deliver updates on an ongoing basis and develop a steady drumbeat of sustainability stories that can be shared throughout the year.
With the media’s focus on ESG issues, companies have an opportunity to gain positive and proactive media coverage. Other communication channels include pushing ESG content in the company blog, leveraging videos to engage and educate audiences, turning ESG data into infographics and sharing stories on company social media channels.
4. Identify your stakeholders
The ESG ecosystem is broad – key players include corporate reporting standard-setters that provide guidance for ESG disclosures, data providers, rating agencies, investors and the general public. Depending on the ESG issues, understanding how the company is viewed by key stakeholders is important when communicating the company’s narrative.
5. Be transparent, authentic and consistent in your messaging
Often companies fall into the trap of green-washing and don’t practice what they preach which presents a reputational risk. People don’t want empty promises. They are keen to hear what companies are doing about key issues so messages should align to company actions and how they drive value and impact.
6. Be outcome-driven
Every ESG statement you make or story you tell, think about how it can be measured and supported with evidence of outcomes. If there has been slower progress in meeting defined goals such as a company’s diversity targets or emissions for example, acknowledge as much, and lay out a plan for what you’re going to do about it. Transparency is the first step, but accountability will be crucial as the ESG remit grows.
7. Demonstrate how you approach ESG differently to others
It is vital that companies identify and focus on the issues that they believe to be most material to their specific business. Much like purpose, these issues should be rooted in a company’s unique strategy, stakeholders, and industry context.
8. Build internal understanding
Having a clear purpose is a vital way to unify a company, and it’s important that an organisation’s ESG risks, opportunities and commitments are communicated and embedded internally – from your employees, right through to the Board and CEO. This will create an engaged employee base who can act as ESG ambassadors and build authenticity from the inside out.
As the ESG landscape evolves, its vital companies keep their sustainability stories at the forefront
to keep up with ever-changing stakeholder demands and perceptions. This will generate high ESG ratings, enhance brand equity and create long-term value.
If you would like to find out more about how our award-winning team can help you deliver effective ESG communications, get in touch with us today.