And those companies’ key stakeholders, their boards of directors and their investors, are driving that emphasis in turn, and they are looking to get managers to focus on lasting sustainability.
That’s the core of ESG: Environmental, Social and Governance, the business approach that comprehensively looks at what it means for an organization to fully commit to sustainability and what it means in practical terms.
The ESG dates back to at least 2006, when the United Nations issued a report called Principles for Responsible Investment (PRI) and garnered 100 signatories from among the world’s largest institutional investors. According to the UN principles, ESG criteria were required for the first time to be part of the financial evaluations of companies. Since then, the PRI, as it is known, has grown to more than 3,000 subscribers and more than $ 80 billion in assets under management.
That, in short, underscores the attention that is being given to ESG. But in addition to sustainability, environmental action and climate change, ESG encompasses support for local communities, corporate social responsibility and DE&I (Diversity, Equity and Equality). It could also be related to water, food, animal welfare, reforestation, climate impact, education, among many other things.
Organizations need a strong communication strategy around ESG, including campaigns and serving opportunities to ensure that inspiring and reactive data, stories, anecdotes, and content are produced consistently across channels.
The components of ESG communications are the same. The best practice is to develop an ESG platform that provides a consistent and rational packaging. The success of ESG communications should be measured in the same way as all communications. Its scope, the perception of the company and if trust has been built both in the organization and in its products.
The number of topics involved seems overwhelming: health, DE&I, technology, social networks, COVID, but it is in the hands of communicators to be able to integrate and drive an ESG strategy and thus shape the future of corporate programs, as well as communicate the success of ESG results.
A brand is a perceived relationship between a company and its stakeholders. It is a constant dialogue, so it is essential to have open communication channels. ESG reports help stimulate conversation and provide hard data to the intangible asset that is a company’s brand. It also allows businesses to publicly commit to certain values that affect brand perception.
The market rewards brands that align values with action. And the Covid-19 pandemic has increased attention to brand values, highlighting the importance of how corporations treat their audiences, particularly their employees and customers. As we well know, much of the corporate value is based on intangible assets such as its reputation.
ESG is not a specific condition for those companies that are listed on the stock market or belong to the financial sector, it is for all those companies that are interested first, in excelling in an environment dominated by transparency and public scrutiny and, second, who want to enrich your brand through values that allow you to differentiate yourself from your competition and gain empathy with your target audiences. In short, endure.