Marketing & Communications

The 3-Part Formula for Effective ESG Communication

Environmental, Social, and Governance issues continue to gain traction and capture investor attention in the corporate world. Yet, sustainability professionals aren’t fully utilizing the power of narrative to engage.

Sponsored Content | / This article is sponsored by thinkPARALLAX | By Jonathan Hanwit | Published 5 years ago | About a 3 minute read

Image: Rodrigo de Mendoza/Unsplash

It’s no secret that ESG investing is on the rise. The mounting evidence of the positive relationship between ESG performance, improved risk mitigation and long-term financial value has sparked remarkable growth in ESG investing. As a result, institutional investors are urging companies to better communicate their sustainability story.

ESG can be a dry subject, making telling interesting stories around it largely uncharted territory. Without a clear path to follow, many corporate sustainability leaders find themselves lost in the dark; what they need is a guide.

In response, our team at thinkPARALLAX developed a new white paper, The Formula for Communicating ESG, which will help guide corporate sustainability and communications professionals to better plan and execute effective communications strategies to achieve higher ESG ratings. The formula focuses on three key pieces: establishing a solid foundation, a strong sustainability report, and effective supporting communications.

1. Build a solid foundation

Why do some sustainability stories stick, while others fall flat? To tell an authentic and compelling CSR narrative, your communications need substance.

Every sustainable brand is built on firm foundations of strategy and storytelling. This involves developing a brand narrative — complete with purpose, vision, mission and values. After establishing a foundation, identify your company’s stakeholders and key ESG issues. Use these issues to set goals and build a comprehensive strategy for achieving them.

With this done, articulate your goals to internal and external stakeholders through a sustainability communication framework. Investors and rating analysts can use this to connect corporate initiatives to your overarching ESG strategy.

2. Get the most out of your sustainability report

In 2018, some 86 percent of the S&P 500 produced a sustainability report. Whether it’s through a microsite, an interactive PDF, a spoken-word art piece or some other form of digital integration, a great sustainability report must be organized and accessible for investors, rating analysts and others to easily navigate.

Your sustainability report should lead with the foundation you already established. Next, display leadership alignment, which can be expressed through a letter from the CEO. Demonstrate how your sustainability efforts fit into the bigger picture by tying them to the UN's Sustainable Development Goals.

Most likely, your company faces material ESG challenges it’s working to improve. Take this as an opportunity to embrace transparency in your sustainability report. Bearing your blemishes authentically shows progress in a way that impresses investors and rating agencies.

3. Include supplemental communication

Complementing your existing advertising mix with ESG-related ads and messaging will keep investors and other stakeholders engaged with sustainability year-round.

A comprehensive thought leadership program — delivering your sustainability story via blogs, op-eds, social media, speaking engagements — is a great way to show an ongoing commitment to the material ESG issues your company is working to address.

A company’s main website is another valuable tool to display commitment to ESG and prime visitors to think of your company as a sustainable brand. Making an effort to have your company’s sustainability story heard has proven value. According to Harvard Business School, public sentiment influences investor opinion about corporate sustainability activities.

Glassdoor is a great example of a medium that offers investors and ESG rating agencies an unbiased look inside your company. Create a culture of transparency by encouraging employees to write external reviews through outlets such as Glassdoor. If your company prides itself on its culture, ethics or leadership style, it’s all the more important to have that supported by external sources.

Of all the stories your company can tell, sustainability is one of the most important. As ESG continues to grow in popularity among investors and other key stakeholders, taking a comprehensive approach to sustainability communications is critical to success.