Environmental, social and governance (ESG) issues continue to gain traction in the business world, especially after BlackRock CEO Larry Fink released his annual letter to chief executives.
In the 2020 edition, Fink stated that BlackRock, the world’s largest asset manager, would begin to exit certain investments that “present a high sustainability-related risk.” To be sure, that proclamation made some CEOs push their panic buttons, also known as the intercoms to their chief communications officers. Because make no mistake, sustainability communications are corporate communications now more than ever, to say nothing of being a critical component to good investor relations. It’s important to note that current expectations around meeting ESG standards aren’t solely the burden of publicly traded companies. As the boundary between sustainability and corporate reporting continues to blur, the model for corporate responsibility will likely expand to private companies, especially if those companies aspire to become public one day. For corporate communications professionals, this can mean taking on additional and perhaps even intimidating work. Having crafted sustainability strategies for a variety of businesses, we thought we’d share some of our learnings.
Integrate Sustainability Into Your Overall Strategy
You likely have a corporate vision, mission and values — hopefully a fully baked purpose platform. The sustainability strategy should work as an extension of that platform — connecting it to the reason why the company exists, the desired future world the organization wants to create, how it will deliver on that vision, and the behavioral attributes employees demonstrate. Doing this means that the sustainability strategy will create value and contribute to business growth rather than be perceived as an add-on and perhaps a drain on resources. It also helps the sustainability story be genuine and believable, which makes engaging employees and gaining alignment from leadership much easier. That is a perk few communications professionals will pass up.
Foster a Dialogue With Stakeholders
When it comes to sustainability reports, key metrics should be obvious, such as those established by the Sustainability Accounting Standards Board (SASB). However, the report should not read like a greatest hits compilation. Communications should work to foster a dialogue with stakeholders to tell a larger story and connect the dots between what the organization is doing and what’s happening in the world around us. To do this effectively and to demonstrate an ongoing commitment, companies should branch out beyond the report. Complement existing marketing communications with ESG-related ads or incorporate your sustainability story into a comprehensive thought leadership strategy. The additional effort in communicating the intangibles or the human story is especially important in the early stages of a sustainability strategy when companies lack the year-over-year results to tell a meaningful metric-based story.
Be Realistic and Transparent With Results
We have worked with Fortune 500 publicly traded companies that have a wealth of ESG metrics and private companies that have little to none. In both cases, we caution businesses to be honest, approachable and, above all, realistic in setting and progressing toward ESG-related objectives. Sometimes that means asking whether your company has a sustainability story to tell. Getting to that answer requires measuring your organization’s true environmental and social impact in its supply chain. As impact investing increases and businesses continue to realize that environmental risk is financial risk, it has become impossible to position a company as good if it is, to any reasonable effect, still propagating bad. The consequences to a brand accused of greenwashing (conveying a false impression or misleading information about sustainability achievements) are far more detrimental than not having or not hitting moonshot-like benchmarks.
While sustainability looks different for every company, one thing is clear: a sound communications strategy and sustainability story helps to secure brand reputation and market differentiation, drive employee engagement, satisfy investors and attract top talent — all key ingredients for long-term profitability.
A STEP-BY-STEP GUIDE
