The concern we hear the most from our clients, whether investment firms or corporates, is the feeling that their ESG communication does not fully convey their ambitions and achievements.
The need to convince and establish one’s credibility about ESG is pressing.
Almost 80% of investors believe that a good sustainability strategy improves returns. And yet, more than 70% of investors consider that the biggest barrier to positive ESG allocation is the poor quality of performance information.
Today, circa 3,000 financial institutions have signed UN Principles for Responsible Investments, representing assets of more than US$100tn, well over half of the worlds’ managed assets.
Within a remarkably short period of time, ESG thinking has moved away from a mere risk management exercise to an absolute pre-requisite of long-term value creation, accelerated by the global sanitary crisis and increasingly dramatic consequences of climate change.
ESG communications are in their early stages, which makes a perfect opportunity to build a reputation as an ESG leader. However, to make a difference, it’s critical to carefully design the communication and avoid three common pitfalls seen even among most significant investment and corporate players.
What is not measured does not exist
> Measurable performance trends matter more than absolute levels of performance
The publication of ESG quantitative performance indicators is an absolute pre-requisite to establish one’s credibility. The good news is that ESG performance trends are more important than absolute levels of performance, since standards are still emerging. Focusing on improvements and commitments is as important as showcasing concrete achievements.
Putting forward external recognitions and frameworks, like the UNPRI or the TFCD is obviously paramount. But only a few companies are publishing quantitative data about ESG performance indicators and targets. Investing time and resources to be in a position to do so strengthens credibility and demonstrates sincere determination as well as organisational efficiency.
Investments in ESG deserve a dedicated communication strategy
> In order to stand out, ESG communication has to be specific
ESG is a story to be told to investors. ESG is aspirational as much as building a track-record. ESG is about people who lead companies and execute the vision. ESG is about objectives as well as resources mobilised to progress in the right direction. ESG positively engages stakeholders as well as raise the overall profile of a company, which can useful pay off to hire and retain talents.
We have the strong conviction that ESG communication has to be specific in order to stand out. Dedicated interactive ESG reports and websites are increasingly common. Posting videos of the senior management talking specifically about their ESG vision on websites and social networks is easy and efficient. And yet, only a handful of companies seize this obvious opportunity to make a difference.
Don’t overlook the impact of concrete initiatives
> The ESG strategy will stick into stakeholders’ minds if it’s concrete, one-of-a-kind and credible.
One of the keys to establish one’s credibility is to showcase concrete initiatives demonstrating convergence between business model and sustainability aspirations. As an evident example, a shift to renewable energies, even at a smaller scale, is not something to be kept untold and especially if this allows to optimize costs.
To be powerful, ESG communication should make the most of traditional communication best practices. It should insist on key differentiators while demonstrating compliance with existing standards. It should be straight-forward, use impactful visuals and leverage concrete case studies.
And finally, to be credible, it should have a face and a voice: senior management endorsement of the ESG strategy is an absolute must. It’s also an obvious opportunity, as ESG is an ideal communication platform for the long-term strategy of a company.
To know more, get in touch today with Accellency and contact Romain Richemont
We provide advisory for the design and delivery of your ESG communication strategy.