In many ways, how we talk about environmental, social and governance themes hasn’t changed in a long time. What has changed in the last decade, though, is we’re discussing it an awful lot more, which means the choices we make in how we communicate on ESG and impact and sustainable business – and the myriad ways we refer to same – are far more critical in the months and years ahead. Because if nothing else, this pandemic has reminded us that people are more interconnected as a global society than they’ve been in human history, never mind the last decade.

In March 2009, the Harvard Business Review published a piece by Mindy Lubber, president of the sustainable investing coalition Ceres. Mindy continues to be a leader and forward thinker on the topic, which is evident in the title to this 11-year-old editorial, “Is ESG Data Going Mainstream?” It certainly was. “Pressure is building for companies to do better,” Lubber wrote just after the Financial Crisis in the same month the markets started an historic 10-year bull run.

Maybe companies felt so much pressure that the ones monitoring them overdid it simply because we’re still having difficulty clearly articulating what is – and isn’t – ESG.

The Financial Times recently published an article about SEC Chairman Jay Clayton’s views on ESG scoring systems and how they’re in danger of being “imprecise.” We’re still talking about data after all this time and it’s reached a point that its use has become so ubiquitous, lines blur between the E, S and G. If it’s confusing to the people who are being paid to discern one from another, what can be said about everyday people and investors’ understanding?

To anyone who’s in the ESG world today: It’s time for considerate thinking and meaningful action in the way we communicate on the matter, whether the focus is social good or climate preservation, because more of us are paying attention.

According to Investopedia’s Editor in Chief Caleb Silver, “reader interest for ESG is up 20% year over year, and our most popular article on the subject has spiked more than 1300%. ESG was one of our top-10 most popular terms in 2019 and 2018.”

What a proof point! Here’s what the path forward on effective ESG communications looks like.  

ESG data will become so commercialized that investors and consumers will be able to look it up on their phones like a Rotten Tomato score. That means a degree of transparency on certain methodologies that is at the moment not yet available. There are various reliable sources that measure a company’s ESG value. The private score keepers might find that they are challenged to produce clear and concise details that helped them arrive at supposed values for a given ESG call. For instance, if an asset manager says Acme Company did or did not meet the criteria to be included in a given ESG investment, the “why” or “why not” will have to be substantiated more thoroughly and publicly beyond just saying yes or no, because the next generation of investors will demand more transparency. We’re seeing this play out now on the social injustice front. People are making it clear how the only path forward is an equitable one for all and they want to know how brands will make that happen. Words matters. Action matters more. 

Accountability will be paramount. It’s not so difficult to believe there are companies who don’t – to use an overused adage – practice what they preach. While “talking the talk” but not “walking the walk” may have worked for a while, investor, media and consumer scrutiny is quickly forcing companies to up their ESG game – and quickly. Producing big content pieces on sustainability but not enacting them within their own organization is a recipe for disaster, or in the least a lawsuit and scathing media coverage. Companies have more constituents who are more engaged and active than ever before, which will force companies to be more accountable and actionable.

Gen-Z and younger Millennials will have a clear understanding of what “ESG” means. One could make a strong case that no one’s talking about ESG as an investment strategy at dinner amongst friends and family. Sure, you might get “sustainability” or “impact” sprinkled into a Thanksgiving tete-a-tete, but most Americans, for starters, regardless of what any survey says, struggle with even the most basic aspects of their finances and 401(k) accounts, let alone specific investment strategies that tied to a particular ESG strategy. The first brand or brands to enrich the youngest of us will embolden that audience to the benefit of their business. Right now, anecdotally speaking, ESG remains a mostly inaccessible term.

US companies, particularly those with no international footprint, will finally grasp how small the world actually is. It took a global pandemic to understand that our neighbors across oceans might as well be just up the street. In financial communications and marketing, we often dispatch messages based on key life events as decision-making drives where money goes and stays. For instance, how families might save for their future college students’ tuition. The scope of that decision often was not limited to where to study close to home, the home now that until recently none of us could leave.

“In Five Oceans, Five Deeps,” Ben Taub of the New Yorker writes, “Waves are local – the brushing of the ocean by the wind. Swells roll for thousands of miles across open water, unaffected by the weather of the moment.”

Throughout the piece, Taub talks about the weather as it factors in any calculated plunge to our blue planet’s depths. His description to an unrelated topic is perhaps the way we could and should think about how we communicate with others on matters of the environment, social good and leadership. That while so seemingly small and insignificant, we are waves interconnected to form something that surrounds us all.


WW_Logo_Final_color
Matt Kirdahy is Partner at Water & Wall, an integrated financial marketing and communications agency.

 


Get the latest PR, IR, Marketing and Media tips on the Business Wire Blog. Subscribe today!

Subscribe to the Blog

  • There are no suggestions because the search field is empty.
New call-to-action