thinkPARALLAX is helping brands master storytelling around ESG issues to engage stakeholders. CEO and co-founder Guusje Bendeler told us more about the agency’s approach to creating a new ROI — Return on Impact.
A big shift is happening as corporations, consumers and investors begin to wake up to the urgent reality of climate change: Corporations are starting to understand that climate change is impacting their bottom line, more and more consumers are voting for environmentally and socially responsible corporate practices with their wallets, and investors are looking for brands with strong Environmental Social and Governance (ESG) propositions. According to McKinsey, ESG investing has increased by 68 percent since 2014 and now accounts for over $30 trillion in investments.
ESG covers a lot of ground. All of the elements work together: A company’s environmental impact is determined by how socially responsible it is (internally and externally). Governance establishes culture and sets sustainability goals, which can drive innovation and increase revenue.
Companies that want to make a big difference when it comes to climate change need to optimize for ESG, which attracts investors. Investments allow brands to build on sustainability initiatives. Southern California-based thinkPARALLAX is a branding and communications agency at the forefront of helping brands champion the cause of sustainability to engage stakeholders. With clients including Southwest Airlines, Qualcomm, International Paper and Scotiabank, thinkPARALLAX focuses on strategy for better corporate and global citizenship, as well as brand activation.
We caught up with CEO and co-founder Guusje Bendeler to learn more about ESG through the thinkPARALLAX lens.
Some of our readers might not be as familiar with the extent to which ESG initiatives are influencing the market across industries. At thinkPARALLAX, what do you tell people who are skeptical about the value-add of an ESG focus?
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Guusje Bendeler: Beyond the obvious social and environmental value that an ESG focus provides, it really comes down to the dollars and cents. Today, more than $30 trillion are invested in ESG-related funds, meaning it’s more essential than ever for companies to focus on ESG and ESG risk mitigation. And this isn’t just a passing trend, as we’re witnessing companies like Unilever announcing plans to sell off their non-sustainable brands — a clear sign that ESG is here to stay.
When brands come to you for help, what is the primary challenge they’re facing in regards to ESG communications?
GB: Often brands come to us with a disconnected set of programs and initiatives around social and environmental priorities that fail to connect back to their business strategy and the purpose of the company. And often, they don't have a structured and cohesive way of talking about it. This results in disconnected communication efforts that can hurt the public perception of the brand and the company's ESG-related efforts. This, in turn, impacts investors’ willingness to invest in these kinds of companies.
We help companies to create a strategic framework that aligns their business strategy with the sustainability strategy, while ensuring it’s rooted in the company’s purpose. This framework is the foundation of the communication strategy and all future communications. We develop this strategy by asking questions like:
What are the company’s ambitions for ESG leadership? What do we want our stakeholders to believe and how do we want them to behave one, three or five years from now?
Another challenge for brands is to know which messages resonate with which stakeholders/audiences and where to reach them. Therefore, a crucial element of effective ESG communications is careful planning. We need to understand what topics our clients’ stakeholders are interested in, and through which channels and formats we can have an effective dialogue with them.
Investors are interested in how ESG connects to the long-term business strategy and how the company manages their ESG risks, which can typically be found in annual ESG reports. Employees and consumers, on the other hand, are much more interested in how the company adds value in the community, and would prefer watching an engaging video on social media as opposed to dissecting dense reports, tables or data sheets.
Understanding who your audiences are; what their beliefs, values, and barriers are, and how we best can reach them are all crucial elements of effective storytelling — and careful planning will go a long way in creating Return on Impact (ROI). Since we often get questions about effective ESG communications, we developed a white paper, The Formula for Communicating ESG, in which we outline more best practices and tips on how to tell your ESG stories in the most impactful way.
Trucost’s Libby Bernick asserts that the UN Sustainable Development Goals are set to drive $12 trillion in revenue and savings per year through 2030. Are a lot of brands approaching thinkPARALLAX because of the SDGs, or are these goals more of an addition to pre-existing ESG initiatives?
GB: Brands come to us because they’re trying to understand how the SDGs align with their existing ESG initiatives. There's still quite a bit of confusion in our clients’ industries and also in our space around how to create better alignment. Rather than leading with the Sustainable Development Goals, we help our clients to see where logical alignment exists and how to combine the two. When a brand is putting their efforts and actions towards the appropriate material issues and is connecting it back to the business strategy, it is not that hard to align those with the SDGs.
In your experience with sustainability innovators driving real awareness about the urgency of meeting climate goals, do you see any commonalities in terms of strategy for creating awareness?
GB: There is a clear trend to frame climate issues as a business opportunity. It is great that brands now clearly see how climate issues matter to their business and understand that they can make a positive impact on mitigating environmental risks, while also benefiting their business and their stakeholders. Brands could certainly push harder, though. It is unfortunate that it quickly becomes political; and some companies are still hesitant to fully embrace climate as part of their brand platform — but hopefully that’s changing, as well.
Which communications channel/platform will be the most effective for engaging stakeholders in 2020, and why?
GB: There is not one channel or platform that is going to be most effective for engaging stakeholders next year. Relatively recently, though, we’re working with many of our clients on positioning them as sustainability thought leaders and using their sustainability commitments as a differentiator. By helping them to understand where they can be a sustainability leader within their industry — and then helping them to produce content, create speakership engagements, and establish partnerships that reinforce this leadership position — we help clients make a positive impact while distinguishing themselves in increasingly crowded markets.