ESG video series PT2: Do your customers care whether you care about sustainability and social impact?
The FT recently described ESG as a “multi-trillion dollar marketing scheme”, and warned that ESG as a strategy could even disappear. This is because of the prevalence of organisations exposed for misleading customers over their green and social credentials. In this second of four videos, we look at why ESG remains top of the buyer agenda and how your ESG comms strategy can and should be structured in a way that ensures you become top of mind.
In the second of our four-part series of ESG (environment, social and governance) communications video sessions, Clearly PR’s managing director Paul MacKenzie-Cummins discusses client and consumer buying behaviours.
Everyone recognises that buyers of products and services are increasingly basing their purchasing decisions on how ‘responsible’ a provider or partner is – the way in which they seek to reduce their impact on the plant whilst improving their impact on society.
At the same time, buyer attitudes have become more skeptical of businesses and brands who bang the green and social drum loudly. That’s in part because of a rise in cases of organisations exposed for exaggerating their environmental credentials (aka ‘greenwashing’) and a failure to move beyond the hyperbole and back up their claims.
Get your ESG communications right, and your organisation will soon find itself positioned as the partner of choice for the customers you want to win.
Watch video, or read the full transcript just below.
Transcript:
Charles Dickens wrote in A Tale of Two Cities, It was the best of times, it was the worst of times. It is a sentence that could very easily be applied to the world of ESG.
Every week, there are stories of brilliantly wonderful and hugely impactful environmental and social initiatives that are transforming lives in one way of another.
And then there are those that see a raft of allegations of greenwashing, purposewashing and misleading customers and investors.
DWS and Deutsche Bank, H&M, KLM, Coca-Cola, Oatly and Shell are all recent examples of this, although Shell is no stranger to such accusations. Nor is Exxon or… wait, this could go on for some time.
These behemoths of their respective sectors have been caught out because their size sees them come under scrutiny for pretty much everything they say and so.
Chances are your business isn’t one that employs thousands of people. You may only have a few hundred or even just a handful of staff, and you would be forgiven for thinking that the degree of scrutiny your customers may put you under won’t be anywhere near as intense as it is for those large-scale employers. And you would be right… ish.
It is unlikely that so much attention will be afforded to investigating each and every claim that you may make as to your E and S governance actions, but that doesn’t mean that your customers aren’t paying attention to what you do and say. They are. They’re just not saying anything and if they have any doubt that you’re not being completely honest with them, they’ll be off.
So, how do you communicate the ways in which your business is curbing emissions and making a positive social impact?
As a communications agency and someone who loves to talk, this may sound a wee bit ironic but the less you say the more you are heard. The focus of any communication is less on the fluffy feely stuff and more on the impact each initiative is having.
Let me give you an example.
Suppose you have committed to gifting 1% of your business’s net income to ESG initiatives. And let’s say last quarter that amounted to a nice round number like £5,000.
You decide to spread that £5,000 across multiple projects. £2,000 went to a local homelessness charity, £1,000 was used for a tree planting scheme, £1,000 was gifted to a child literacy project, and the final £1,000 found its way to a water poverty charity in Somalia.
Sending out a news story detailing the above is all very well, but it lacks any real punch despite these all being extremely deserving and worthy causes. What you need to be doing is reporting on impact – what we call Responsible Reporting.
Responsible Reporting is something that will, in our view, become just as important as the financial reporting you will already be doing, so now is a good time to get yourself familiar with this – just give me a buzz if you need a steer.
In practice this means qualifying all that you do – by gifting X amount, we have positively impacted Y.
Take the £2,000 for a homeless charity. As trustee on the board of a homeless charity myself, I can tell you first hand how massive a deal this is. That money could kit out the homes of four people who have gotten off the streets and been moved into their own accommodation.
Or look at the £1k that you gave to a child literacy project. Did you know that 1 in 4 children in the UK do not meet the national minimum standard for reading and writing by the age of 11 years old, yet just £30 gives one child reading support for an entire year.
So that £1,000 you gave last quarter will help more than 33 children to improve their literacy skills which in turn could increase their future prospects and play a key role in helping to reduce the unacceptable high rates of youth unemployment we currently have which currently stands at almost ½ million 16-24 year olds.
Can you see the difference that quantifying your gifting can make? Saying you committed £1,000 to a child literacy charity sounds good, but explaining that this will help 33 young people sounds incredible.
This is how you need to think about your ESG communications. Ditch the hyperbole that serves no other purpose than to make you appear to be a business that’s desperate for attention and craves to be loved by all and sundry to the point of eyebrows being raised and questions of Are they for real? being asked.
Instead, back up everything with We’ve done that, and this is what it means statements. Only then will your target audience a) believe you b) respect and trust you, and c) be influenced enough to chuck your business’s name into the hat of contention when it next comes to reviewing who they partner with for the products or services that you can provide.
No business with genuine intentions should ever fear being accused of greenwashing. The simple act of demonstrating the value of each action you take, and the impact it makes, will shuffle any prospective doubters to the side and free up the path in front of you to steal a march on your competition.
In the final video of this series, we’ll walk through the ROI that you can derive from executing an effective ESG communications strategy.
In the meantime, again, thanks for watching and if you have any questions on something you have just heard, feel free to message me via the contact form on the website – it will come straight through to me.
