The sustainability conversation has fundamentally changed in the pandemic. The classic trade-off between environmental and social commitments and shareholder value has been challenged as environmental, social, governance (ESG) investments have outperformed the market. As a result of changing market dynamics, increased global regulation, and advocacy from key players like BlackRock, there’s a greater acceptance of stakeholder capitalism whereby corporations are oriented to serve the interests of all stakeholders (customers, suppliers, employees, shareholders, and communities), versus just shareholders.
We’ve seen discussions about sustainability and progress broaden from a focus on the environment to include social and governance against the backdrop of the social justice movement. We’ve seen sustainable investing enter the mainstream, and a greater alignment between consumer, employee and shareholder values. Ultimately, we’ve seen a shift in values towards a cleaner, greener and more equitable future with transparency and ESG at the centre of the conversation.
So, what does the rise of ESG mean for communications?
1. Aligning purpose, vision and impact is critical
Your organization’s purpose anchors your shared vision with your audiences, grounds your values and sets the direction for how you operate. To be relevant today a corporate purpose must reflect a commitment to progress on environmental, social and governance impact. Aligning purpose, values and impact is critical to a cohesive ESG communications strategy.
2. Accountability is on the rise
Corporate reputation has always required that communications match impact, but now we can measure an organization’s impact against its competitors. As we move towards consistent and comparable ESG reporting, organizations will become increasingly accountable for delivering on the vision and values they communicate. While measurement isn’t the end goal, a comprehensive ESG framework helps organizations create accountability and deliver on their purpose.
3. Global regulation is increasing expectations
As global regulation changes so do expectations. We’ll see the goal post continuing to shift on what leadership looks like across all indicators of ESG. As organizations gain leadership positions on various indicators, they’ll need to continue to invest to maintain their position and demonstrate their commitment.
4. One-way communications aren’t sustainable
Communicating on today’s impact isn’t enough. A sustainable ESG communications strategy requires that we engage with our audiences to understand what is most important to them today and gain a shared vision for the future. That way we can deliver on material issues today, both in terms of impact and communications, and invest to meet the material issues of tomorrow.
5. Communication on ESG is a business imperative
Standing down is no longer an option. Brands that don’t communicate are assumed to be failing to act. Taking action on ESG is as important as reporting and communicating when it comes to an organization’s reputation and returns.