The benefits of an effective ESG strategy

Environmental, social and corporate governance (ESG) has become increasingly important in recent years as employees and consumers take a greater interest in the decisions made by the companies they choose to engage with. The climate crisis and the Covid-19 pandemic have accelerated the evolution of employee and consumer expectations making the effective communication of ESG a crucial part of successful business strategies.
 
What is ESG?
Environmental, social, and corporate governance refers to a company’s policies and practices relating to the environment, the communities it operates, and the internal decision-making processes around how the company is run.
 
For example, a company’s ESG strategy may layout its carbon emission reduction targets and actions, policies around fair labour and the Board composition.
 
 
The benefits of an effective ESG strategy
 
ESG is a powerful tool and can have far-reaching effects with employees, customers, investors and other stakeholders taking an interest in the decisions and actions made by brands. As such, robust and meaningful ESG strategies can offer numerous benefits on top of the environmental and social progress they facilitate.
 
PWC’s 2021 Consumer Intelligence Series survey on ESG showcased the importance of ESG to employees. The survey showed that 86% of employees prefer to work with companies that care about the same issues they do. This could include active participation in the limitation of climate change through actions that reduce carbon emissions and further the net-zero journey.
 
The survey also showed that 76% of consumers would discontinue relations with companies that poorly treat employees, communities, and the environment. This statistic highlights the value of an ESG strategy that resonates with the target demographic and makes your company stand out amongst your competitors. Simultaneously, this substantial figure underlines the risks of failing to address the issues that matter to consumers.
 
ESG is also important to businesses looking to take their next steps as investors are increasingly looking towards companies with strong environmental ethics. ESG data is even being factored into the investment analysis process to highlight the potential for growth and any risks associated with the business’s strategy.
 
In addition to creating a connection to the business’s key stakeholders, a well-constructed ESG strategy could even help future-proof a company. The issue of sustainability is here to stay. From the management of natural resources to a renewed focus on energy efficiency, building these critical components into your ESG may help ensure that the business is prepared for the next steps in the journey of net-zero and climate stability.
 
 
Communicating an ESG strategy
 
Well-constructed communications are crucial to ensuring that ESG strategies are understood by their intended audiences, and engaging a communications professional can transform how effectively your message is shared. By leveraging their in-depth understanding of your market, consumers, competitors and stakeholder community, a communications team can support you at every step of the ESG communications journey, from initial strategy development to reporting and showcasing progress. 
 
Your business’s functions and processes, the suppliers and clients you work with, the teams you employ, and the investor community you serve all impact your ESG. Communications professionals can work with this information to help you identify your social and environmental impact and use this as the building blocks for your ESG strategy. From here, the team can help you articulate your commitments, formulate your goals, and layout the processes and activities that will help you reduce the social and environmental impact going forward.
   
Communicating ESG to your stakeholders and the wider community is not just about saying you have an ESG strategy but about showing that the action taken has a tangible impact. As such, models and data that can quantify the progress made towards goals in real terms are crucial to the communication plan. Not only do these statistics show that you are continually focused on these critical issues, but the figures can serve as evidence of the brand’s genuine commitment to the cause.
  
Having your brand recognised as an ethical business is now more important than ever before. By regularly reporting on, updating and adjusting your ESG to ensure that it is in line with the broader industry and the expectations of your stakeholders, you can create a secure strategy that will go the distance.
 
For more information on how we can help build and communicate your ESG strategy, please contact Lisa Gingell on email: [email protected]
​