No matter the industry, company, consumer or stakeholder - trends are always being generated, developed and some also revisited. Within the last decade, ESG (Environmental, Social and Governance) has been put on the pedestal in both the business and investment worlds. This has especially taken a sprint since the transition of Millennials are now slowly taking over the business world from their predecessors, and are naturally more environmentally conscious.
One thing to make clear is that when we mention the word “environment” in this scenario, we are not only referring to the Green environment, but we must look at it on the greater side of things and take into account internal company HR, Consumer treatment, solution provision for the good of the country and internal government structure within the company.
What is ESG?
ESG stands for Environment, Social and Governance and what that really is is a framework for analysing companies and really assessing how well they compare to their peers in terms of performance against these metrics:
1. Under “E” you have water usage, waste production and general kind of environmental behaviour, tackling efficiency at managing their resources, and also looking after the environment around them.
2. Under “S”, it’s about how well they treat their clients, their workers and also considering some diversity aspects around the management in the workforce.
3. Under “G”, you go over points surrounding share class structure, and government structure within a company - basically how well a company is run.
When one puts all these together, what you’re looking at is how you can assess a company without looking at its balance sheet and rather look at how it impacts the broader society at large.
The consumers have spoken
According to Morgan Stanley, 86% of millennials are interested in sustainable investing, and a Sustainable Brands survey found millennial investors are more likely to integrate sustainability into their consumer behaviour. As millennials become employees, buyers, and investors, they’re taking note of positive corporate action and rewarding them with loyalty. A BoF & McKinsey report estimated 60% of global millennials are willing to spend more on brands with a CSR commitment.
A 2021 global PWC survey begged questions towards consumers to understand what the perception is towards these big companies and how they are performing in terms of keeping in line with ESG tactics. The general consensus is that consumers (especially millennials) want to see businesses play an even bigger role in accelerating progress on ESG concerns, they want businesses to invest in making sustainable improvements to the environment and society, not just comply with regulation, and they’re prepared to reward (or penalize) brands accordingly.
For the full reporting and analysis for the thorough PWC survey, kindly click here.
Building your brand through ESG practices
In a world of social media and 24-hour news, companies are under constant scrutiny by investors and customers alike, from their investment selection process to their employees’ health and wellness benefits.
While the idea of sustainability isn’t new, incorporating ESG efforts, strategies, and reporting into a core business model is becoming increasingly important to companies. Centring your marketing efforts around the company’s sustainability strategies and telling that story effectively will increase brand loyalty and value.
A competitive advantage can be gained over other companies if marketing efforts are focused towards communicating proactive and integrated ESG policies. Managerial departments should primarily set the framework for operational policies to be put into place and then the marketing department should showcase these improvements with special relevance to improvements in labour conditions, employee diversity, giving back to the community and consider taking a stand on environmental and social justice issues to strengthen the company brand. It is key for marketing departments to Explore brand values, redefine mission statements and set strategic goals to implement ESG practices.
Below are the ways in how a company can achieve this. This will only work if the internal vision has been set and certain operational and organizational changes have already been put into place.
Analysing your ESG story
Your brand, your brand, your brand. How is your brand perceived vs how do you want it to be perceived? To reach that perception, what is the brand story going to be? Proper narration takes a novel to the next level. This is no different in marketing your brand. Consider all media and elements within your brand as they can help as you develop your sustainability narrative.
Consistent communications approach
What is your unique company point in terms of ESG? Have you identified it? If you have, then how are you communicating it? Make sure that your communications approach consistently falls in line with your mission, values and goals. The consistency must prevail across investors, employees and consumers alike to ensure a unified message.
Focused content marketing
We live in an era of constant communication. Being top of mind is the most crucial, yet the most challenging aspect in today’s marketing world. As consumers we are drenched with so much content coming from all angles that if content push-out is paused, even for a little while, as a company you would be risking losing consumer-interest.
To stay authentic, you should not address every single nation-wide issue and nor do you have to! Be focused and narrow it down to issues that integrate well within your company identity, values and mission. Promote success stories, use educational ESG infographics, share employee/consumer testimonials, push out brilliant articles and always push out content which is informational and not promotional.
Clever public relations
The media plays a crucial role in shaping public perception. Consider developing a public relations strategy that gets the word out about your company’s ESG efforts through appropriate media channels. However this includes riding a very fine line. Companies who go down the PR injection route must be wary that
1. The brand narrative is being presented consistently
2. Not to overdo it. Hence the adjective “clever” in the subtitle. Consumers can suss out companies that try too hard to look good and get on consumers’ good-books. In the eyes of the average Joe, this can compromise the genuineness behind the brand story.
A company’s ESG marketing efforts must extend beyond blogs and public relations to ensure your story is authentic. Empowering employees and really establishing the “ambassador” approach. Sharing success stories and helping employees take ownership of ESG efforts promotes success through a decentralized management approach.
As mentioned in the introduction, ESG initiatives skip away from consumers checking the balance sheet. While this is all true, at the end of the day, a company remains a company. Trustworthiness can not exist solely through ESG efforts but consumers do also take into consideration the company’s performance and the products/services it has to offer. All this combined with ESG efforts will certainly be the most effective.
Consider pushing out success stories and enabling partnership programs both with other companies as well as consumers.
How to track your ESG progress
Once your ESG strategy has been implemented from both an operational aspect as well as a marketing point-of-view, as a company-owner, the final thing needed is to track the progress and analyse whether all the ESG investment was worth-while - and if not, then it is important to see how the ESG strategy can be optimised in order to make it worth the investment.
Since we are considering brand identity and brand perception here - the best way to track your ESG progress would be to go directly to the consumer and potential consumer. The best way to do so is by pushing out pulse surveys which, depending on what your business is, could set a benchmark against your competition as well as get real-time knowledge on where your brand stands and like that, you would be able to analyse whether or not you are on the right track with your ESG strategy.
Pulse surveys are short, concise and flexible. They can be targeted to specific demographics and are the perfect way to collect real-time feedback that can then be worked on for optimisation in whatever the feedback is as they inform and enable smarter decisions. For further information on this specifically, kindly click here for more information.