THE ESG GOLD RUSH: HOW TO TELL AN AUTHENTIC ESG STORY
ESG is a topic of increasing prevalence.
Marketers and companies are responding by integrating ESG issues into their financial reporting, board agenda, and broader communications.This, however, is proving to be a challenge as there is still much uncertainty around ESG legislation, terminology, and data needs. Telling a relevant, timely and credible ESG story to audiences in a time of extreme public cynicism and awareness only adds to this challenge.
With this in mind, we organized an interactive online panel event that posed the question - how should marketers approach communicating their ESG proposition? And what are the best ways to do it?
Joining us, we had expert panellists alongside our CEO and Founder, Stefano Marrone, who discussed their experiences with ESG and how they’ve overcome their communication challenges.
Matt Sparkes, Global Head of Sustainability at Linklaters leads their work on responsible business globally, ensuring that their ESG performance reflects the expectations of those around them and the advice they provide to clients on many related themes. He is active in a range of sustainability networks, including as co-chair of the Legal Sustainability Alliance, as chair of Business for Societal Impact, as a Board Member of the UNGC-UK Network.
Alison Collins, Director and Head of ESG at Pollen Street Capital, leads the development and management of the Pollen Street Hub – to accelerate growth and value by leveraging assets, expertise and ideas across the portfolio. Alison also has responsibility for running Pollen Street’s ESG program and is Chair of the ESG Committee.
Catch up on the event highlights below or read on for a full event write-up:
Alison kicked off the panel by discussing her main challenges with communicating ESG, discussing how important authenticity and originality is when relating your ESG story to the business. From her experience, engagement comes when you link the tangible impact relevant to the business - this relevance and authenticity is one of the key challenges of ESG communications.
Matt followed up with another key challenge. He revealed that the more stories of responsibility that you put out, the higher the expectations are of your business and the more scrutiny there is of your business. He also explained that you don’t want to undersell the good stuff you’re engaged in. However, by being proactive and telling the ESG story, the bar is constantly going to be rising.
The definition of ESG often gets debated, so Stefano invited Matt and Alison to comment on their thoughts on this. Matt kicked off by saying that ESG is about being a responsible business in all aspects of how you operate and looking at other businesses through that same lens. He asserted that everyone can get very hung up on definitions - and spend so much time talking about what is and isn’t ESG that you can forget about the outcome and the product.
“I’ve seen a shift from clients asking about what the ESG policies are to what the outcomes and the numbers are. As such, where CSR was an art, ESG can be considered a science.”
Alison agreed, saying Pollen Street is seeing a shift from people seeing ESG as risk management to seeing it from a value-creation perspective. Having reporting that engages different audiences, thinking about what they’re after is also an extremely important aspect.
When communicating ESG initiatives, the term greenwashing is often brought up and can lead to an element of deception or false impressions. Alison discussed that not every business will be able to meet all impacts areas. Focusing your ESG efforts in places where you can have a real impact is helpful in avoiding greenwashing or rainbow washing. It comes back to her earlier point in concentrating your communications on what is relevant to your business.
Matt followed up by saying that he believes there are two key aspects of greenwashing - making sure that your claims and engagement stand up and ensuring that the business is doing the right thing and behaving itself. Alison added that maintaining consistency across your communications and activities helps align what your employees are saying and what you’re saying as a business.
Stefano picked up an audience question asking if any brands are doing a good job of communicating ESG and if there’s any not doing so well. Alison led by talking about the COVID-19 pandemic being the most significant crisis to ESG that we’ve seen over the last 18 months. She added that those brands with crisis management policies in place and who thought about all their stakeholders are the brands who have done particularly well during the crisis.
Matt brought it back to the challenges of communicating ESG. He said there’s not enough acknowledgement that it’s hard to get these things 100% right. No one is infallible just because they start incorporating ESG into their business. Stefano followed up with a point about purpose and value. Over the last 18 months, we’ve seen a growing trend of acknowledging that we’re all human - but there’s an idea that organizations (which are made up of people) are supposed to be far more perfect than the individuals that make them up.
Later the panel moved towards a discussion about internal and external communications. Matt discussed that your internal communications need to be just as strong as your external ones. He added that the actions of each individual within the business reflect upon the organization, so it’s essential to make sure your people know what the right thing to do is.
And with this kind of communication, Stefano started a conversation about each element of E, S and G and what is becoming increasingly important to communicate. Alison began by saying that there’s so much said about the acronyms, pointing out that the sustainability and responsibility aspect is much more important than trying to fit your efforts into one of these capital letters - either E, S or G.
Matt commented that communicating each element of ESG is a lot about what you put out internally and externally. ‘E’ is more straightforward in terms of definition, particularly since there are plenty of frameworks that help us all recognize what ‘good’ looks like in this context. Governance has seen a cultural shift in bringing out what has been discussed internally for a while but is now moving externally. Whereas, he’s observed that the social aspect of ESG will become increasingly important to sustainable development goals, particularly since the pandemic began. He believed it would be essential to communicate about how businesses contribute to making society better in terms of infrastructure and how your mainstream, day-to-day work is making a stronger world around us.
Wrapping up the panel, Stefano drew the conversation towards the impact of COVID-19 on ESG communication. He observed that there had been some conflicting narratives between the positive green impact of COVID-19 and the individual impact of living in a more liquid world where you can work from wherever in the world. Alison followed up, picking up on the earlier point about the S piece of ESG. She commented that COVID-19 had shone a spotlight on employees’ health, well-being, and engagement, debating the impact of what effect not being together in an office has on employees. In her own experience, she’s found the opportunity for development and mentorship in an office to be invaluable to her and her employees.
Matt followed up with another interesting challenge that has arisen over the last 18 months, of how we invest our time and money or, as he called it: domestic capital vs corporate capital. He pointed out that while we’ve all been working from home, we’ve invested more locally and therefore increased our domestic capital while our corporate capital, which would have been 100% when in the office, has significantly reduced. He exerted some concern about the impact of this on the strength of the corporate post-COVID world.
Telling a cohesive ESG story is no doubt a challenge and provides a great debate about what your narrative should be. As spoken about in this panel, authenticity, consistency and focusing on the outcomes and metrics of your initiatives are essential when formulating an ESG communications strategy.