Everything You Need To Know To Improve Your ESG Communication Strategy

Environmental, social and governance (ESG) reporting is a big undertaking, but companies are realizing the benefits, encouraged by demands from consumers and investors. But once all of the reporting work is done, that information needs to be communicated to the public.

This is a tricky task. If companies boast about their strategy or overstate their performance — whether intentionally or accidentally — they run the risk of being labelled a greenwasher, a tag that could bring financial and regulatory consequences along with lost trust among stakeholders. Stay too quiet — also called greenwhispering — and companies can appear ambivalent about ESG issues.

It’s a difficult balancing act but a necessary one. Effectively communicating ESG performance is vital to avoid throwing away the hard work a business puts toward developing an ESG strategy and measuring performance.

Why is it important to communicate ESG performance?

More than ever before, consumers and investors want to support brands committed to sustainability and social impact. A study by Kantar showed that the brands consumers see as having a positive impact grow at twice the rate of other brands. Today, demonstrating that your brand is a responsible corporate citizen is necessary to ensure long-term sustainability and growth.

Research technology business Glow measures consumer perceptions of companies and their ESG efforts. Their data shows that 25 percent of consumers have changed brands because of perceived ESG performance with the brands deemed to be most sustainable gaining twice as many switchers as the average brand.

There are plenty of stats to show that both consumers and investors care about ESG performance and are willing to put their money where their mouths are. Being able to communicate your ESG progress and performance is a vital part of doing business today.

Despite companies’ tireless efforts, however, only 12 percent of brands have “top of mind” social issue associations with consumers. Findings like these indicate that communicating to consumers that you are sustainability-minded and conscious of your wider social impact is easier said than done.

How to communicate ESG performance

First things first: Companies need a strong ESG strategy, complete with attainable goals and a commitment to measure progress, or they’ll have little to communicate. As companies get started, they’d be wise to focus on transparency and authenticity, first and foremost. No matter if the results are good, bad or ugly, staying transparent and authentic is the name of the game. It’s not only the easiest course of action to maintain, but also the best way to build trust among stakeholders.

Being transparent means showing where your business is on its ESG journey, as well as where it plans to go in the future. This should be complete with intermediary goals and a commitment to keep stakeholders in the loop about progress. Authenticity includes balancing attainable short-term goals with more aggressive science-based targets that provide a realistic path forward. Any business can say it wants to be net zero by 2050, but having a concrete plan to get there is what it is all about.

Allowing consumers and investors to have an unobstructed view of all things ESG, whether good or bad, will build trust, demonstrate commitment and motivate your internal team to strive for continual improvement.

Telling an ESG story

While transparency is important, and indeed it’s increasingly required by investors and regulators, dumping data on consumers isn’t likely to be effective. For ESG data to resonate strongly, it has to be presented in a relatable way.
This is where the importance of ESG storytelling comes into play — some method of relaying your goals, intentions and progress in a way that speaks to consumers.

When telling an ESG story, the subject of the story should be the impact, not the program. Rather than spouting numbers on how much money is being donated where, or new hiring policies that favor traditionally underserved communities, bring the people those initiatives are affecting to the front and center.

Consumers can relate to one person’s story. Piles of stats and data are valuable, but they can be difficult to strike a chord with your audience.

Where to communicate ESG performance

In today’s technological wonderland, it isn’t easy to know where to focus your messaging. Do you go for earned news coverage or paid advertising in print or TV? And what about other ways to reach your desired audiences?

According to data from Glow, consumers in particular receive the majority of their ESG information from news coverage, advertising and social media. When asked where they would like to receive ESG information, consumers brought another preferred medium into the mix: product packaging.

Depending on what your company sells, it can be difficult to tell your entire ESG story on a package. But combining different media while focusing on the same story or campaign will help consumers and other stakeholders begin to associate your brand with your chosen cause. Narrow your focus to something that your customers will relate with, and spread that message.

What does effective ESG communication look like?

Dove, a giant in the hair and skin care industry, has advocated for body positivity for nearly 20 years — and that hard work and consistent focus is paying off with consumers.

In a 2019 survey from DoSomething Strategic, respondents were asked to associate brands with a specific cause, and 53 percent of respondents associated Dove with body positivity, the highest association with a single cause of all brands surveyed.

Dove’s focus on a story and social cause that resonated with customers has made it a consistent favorite among conscious consumers. Glow’s ESG brand tracking data shows that Dove is performing significantly above average for grocery brands in the US driven by recognition for its body positivity campaigning as seen in open-ended comments about Dove such as, “they promote body positivity,” “they support women’s issues” and “they have a girl's positive self-esteem program.”

Dove’s leadership clearly understands their market and builds the brand’s story around a social cause that is relevant to their products. Dove's ESG initiatives also extend to other areas such as forest restoration and reducing plastic use in packaging, but the brand narrowed most of its consumer communication to the body positivity cause — and it has resonated strongly with consumers.

The bottom line

Communicating and storytelling is a vital part of ESG, but it is nothing without a strong ESG strategy. Committing to transparency and authenticity in all aspects of your company’s ESG journey, and finding a story to tell that will resonate with your consumers, is the recipe to building positive public perception.

This article series is sponsored by Glow and produced by the TriplePundit editorial team.

Image credit: Parradee/Adobe Stock