Environmental, social and governance (ESG) has become increasingly important to businesses in recent years. Investors, customers and employees are all becoming more interested in how companies are managing their ESG risks and opportunities. As a result, businesses are under rising pressure to develop strong ESG programmes and effectively communicate their ESG efforts and broader sustainability strategies.
However, ESG as a concept has also faced some backlash, particularly in the United States, where it has become a political talking point – mostly around the perceived removal of investments and funding for coal-producing regions. The politically-charged media has suggested that ESG is being used to promote a particular agenda, such as climate change activism or social justice. Combined with an overall attack on ‘wokeness’ from some parties, this perspective is muddying the waters of companies’ genuine and valuable approaches to building more sustainable businesses.
The backlash against ESG investing is likely to continue in the United States, but it is important to note that ESG investing is a relatively new phenomenon that is still evolving. As ESG investing matures, it is possible that some criticisms will be addressed.
Evidence of the criticism of ESG in the United States includes certain states passing legislation that prohibits state agencies from doing business with financial institutions that divest from fossil fuels. And at a federal level, some Republican lawmakers have introduced a bill that would prevent the Securities and Exchange Commission from requiring companies to disclose their ESG data altogether.
One strategy that a company can use to avoid any criticisms of its ESG approach is branding. A well-branded ESG programme can help establish a following of ESG initiatives and create a brand that can outshine any negative backlash.
The following are some tips to help you avoid situations where your ESG programme may get caught up in the politics of ESG. By following these tips, businesses can build a strong reputation for ESG leadership.
Start with a clear and concise ESG mission statement
An ESG mission statement should articulate the company’s ESG goals and values. It should be easy to understand and remember, and should be reflected in all of the company's ESG communications.
Use consistent messaging across all of your ESG communications
Use a consistent message, tone of voice and visual style across your ESG mission statement, website, social media channels, annual report and other materials. The message should be clear, concise and easy to understand. Consistency will create a strong brand identity for your ESG programme.
Use data and visuals to support your ESG messaging
Using data and metrics will help make your ESG communications more powerful and persuasive by giving them credibility, while images and videos can bring your ESG mission statement to life and make your ESG communications more engaging.
Tell stories about your ESG successes
People are more likely to be persuaded by stories than by statistics. Share stories about how your ESG efforts are making a difference in the world to build customer loyalty, attract top talent and enhance corporate reputation.
Get employees involved in your ESG programme
Employees are the best ambassadors for your ESG efforts. Encourage them to share ESG stories on their social media and talk about your ESG programme with their friends and family.
Proactively engage with your stakeholders
Be transparent and proactive in sharing your ESG goals, progress and challenges with your stakeholders. Share your stories and successes with them on a regular basis, seek their feedback and respond to their concerns.
You should also consider the name of your ESG programme to focus less on the ‘ESG’ label and more on the substantive elements of your message. Some companies have started to brand their ESG reports differently to focus on sustainability, while others have looked at the naming and branding completely differently.
Here are several ideas for naming your ESG to add value and remove any stigma:
- Our Commitment to the Future
- Making a Difference
- Investing in Our Planet
- Building a Better Tomorrow
- The Power of Positive Change
- Leaving Our Mark
- The Future We Choose
- The World We Want
- A Sustainable Vision
- A Responsible Future
- Our ESG Story
- Our Sustainability Journey
- Our Social Responsibility Report
- Our Footprint
- Our Commitment to You
- Our People and Planet First Approach
- Our Planet Partnership
- Our Sustainable Business
- Our Innovative Approach to Business
- Our Planet Leadership.
Despite the backlash, ESG investing is still growing in popularity. The overwhelming message is that ESG and sustainability practices are here to stay and that companies are broadly embracing them.
While your ESG and sustainability efforts should not be diluted because of political reasons, rebranding your ESG programme to something like the options above may actually tell a much better story. Building a brand around your programme and naming it something that reflects your company can increase the programme’s value and adoption while shielding it from the political bias that has unfortunately entered the mainstream agenda.