In May 2021, a small activist hedge fund won a proxy fight for two of Exxon Mobil’s board seats by promising to improve the company’s record on environmental issues. Exxon Mobil shares rose 1.2%, with analysts predicting an 11.6% increase over the next year.
The same month, multi-Michelin-starred restaurant Eleven Madison Park announced it would reinvent its menu to offer 99.99% vegan dishes, citing the need for food sustainability. Said chef-owner Daniel Humm, “I wanted everyone who comes into contact with Eleven Madison Park to become a part of doing good.” Reservations for a $335 prix fixe meal quickly booked up through July, with a wait-list of 15,000 people.
Today, people want to do business with businesses that are doing good. In just the past three years, there has been extraordinary proliferation and success among ESG—Environmental, Social and Governance—initiatives in consumer and B2B organizations. In the stock market, investments in ESG-dedicated funds have grown exponentially, rising from $5.4 billion in 2018 to $21.4 billion in 2019 to $51 billion in 2021—and $21 billion in the first quarter of 2021 alone. And the number of certified B Corporations (companies deemed to meet strict standards of social and environmental performance) increased from 82 in 2007 to more than 3,500 in 2020.
Said Blackrock CEO Larry Fink, a leader in ESG investing, in an open letter to CEOs: “Over the course of 2020, we have seen how purposeful companies, with better environmental, social and governance profiles, have outperformed their peers. … It is clear that being connected to stakeholders—establishing trust with them and acting with purpose—enables a company to understand and respond to the changes happening in the world.” Recognizing the important role that ESG now plays in investment decisions, the Securities and Exchange Commission has said that ESG disclosure regulation will become a central focus of its regulatory agenda. The European Union already mandates sustainability-related disclosures in the financial services sector and has introduced draft legislation that would require businesses to conduct due diligence on supply chain human rights and environmental impacts.
Increased support for actions that benefit the public is, of course, a positive development. But as with many good intentions, there’s a backlash—companies pulling the sustainably grown wool over the eyes of unsuspecting consumers and investors with false, vague or unverifiable ESG claims. And as companies from around the world jump on the ESG bandwagon, it’s getting harder to tell whose programs are meaningful and whose promises are trustworthy.
That’s where a focused, intentional communications approach can help. To be taken seriously as an ESG leader amid the noise, we recommend a strategy based on CARE: Creativity, Alignment, Reporting and Engagement.
A statement of principle on your home page is good. A story with photography, video and quotes is better. Meeting the people and seeing the places your ESG initiatives have touched is engaging and memorable.
Think about impactful ways to share your proof points. Did your sustainability program cause a 50% reduction in nonrecyclable trash? Don’t just tell—show. Bring your story to life with infographics, timelines, animations and other visual elements.
If your program is robust, consider providing an interactive website experience that allows for easy updates and lets visitors control their own journey. Experienced designers can show you how to work with a variety of platforms that allow a deep dive into a visitor’s special area of interest.
The most credible ESG programs mirror the company’s overall mission and brand identity. Take Patagonia, for instance. Long known for its brand promise of outdoor adventure in wild places, Patagonia prioritizes recyclable materials in its clothing and products, minimizes impacts throughout its supply chain, advocates for public lands, and donates to environmental causes. By lining up its ESG initiatives with its products and brand, Patagonia continues to increase its trust factor as the first-choice company for those who love nature and care about the environment. Its business has become inseparable from its environmental advocacy.
Don’t hide your LED light under a bushel when it comes to ESG. Get the word out as often as you can through as many channels as you can. Impact reports are a great way to provide a comprehensive view of your program but may not be responsive to fast-breaking developments and new initiatives. Pair them with regular social media posts shared not just by your organization but by its individuals as well. Look not only at LinkedIn but at Instagram and other platforms used by prospective employees who see ESG values as a plus in considering career opportunities. And update your website regularly to show your program’s momentum and importance to your organization. The more impressions you make, the more people will come to associate you with ESG leadership.
As with any initiative, momentum is crucial to an ESG campaign. New or expanded initiatives mean fresh content, long-term relevance and more reasons to report. Keep your audience’s interest by keeping your program in motion.
When people in your organization are actively involved with ESG, it becomes an integral part of your culture, not simply an add-on. There are many opportunities to engage employees in support of your ESG goals, and they are generally excited to join in. You can start by holding internal events to raise awareness and invite participation. Organizing events where people at all levels work together for an important cause can be great for team- and morale-building. Take it to the next level by empowering workers to generate their own ideas and coordinate ESG projects—and recognize those who do. Employees can be your greatest assets when it comes to building a believable ESG-forward culture. Their enthusiasm can help with both hiring and retention of talented prospects as workers at every level increasingly weigh ESG as a key factor in choosing or remaining with an employer.
Employees can be your greatest assets when it comes to building a believable ESG-forward culture.
You can raise your ESG profile by engaging your clients, customers and vendors as well as employees. Become a resource on ESG issues that matter to you (for example, you could publish a guide to clean energy initiatives on your website). Or ask others to join your efforts and become part of your ESG team.
While you’re at it, remember to take pictures, create videos and report on all this great ESG activity!