To say ESG has hit a rough patch would be an understatement. Saying too much about your ESG goals can leave you accused of greenwashing or “woke leadership,” while greenhushing—or not saying anything at all about your efforts—may be a bigger problem when it comes to effective long-term sustainability communications.
Halfway through 2023 legislators have filed about 99 “ESG backlash” bills, compared to only 39 in 2022, and a report issued by the consultancy firm, South Pole, finds that many companies are trying to avoid backlash for their ESG efforts by going completely silent. We’ve been tracking reporting trends and over the last year we’ve seen an increase in the use of the title of “ESG Report” over “Sustainability Report” within a sample of the Fortune 50. Consumers are as dedicated as ever to supporting companies sustainability efforts—a survey by Accenture found that 60% of consumers would stop buying from a company that wasn’t taking environmental issues seriously. With tides rapidly changing, what’s the right course to chart?
Here are four strategies for navigating the opinions of your harshest critics and most important stakeholders when it comes your sustainability/ESG communications:
1. Consider both sides of the debate when strategizing your sustainability/ESG communications plans.
The goal of ESG is to support companies in developing long-term strategic plans, identifying and mitigating material risks, and recognizing growth opportunities. As a recent Harvard Law School study found, pressure on companies from stakeholders to weigh in on social issues has never been greater. On one end, securing more robust ESG data for the issues you choose to tackle, not less, to support could lead to a more holistic approach—enabling businesses to make more informed decisions, create better brand communications, and contribute to better public policy. On the other end, evaluating how a critic may be combative to these goals will be helpful in honing what matters in your communications, and being prepared with a response, should you need one.
2. Get to know your core sustainability/ESG audience and what they care about.
What do your investors and stakeholders care about? What does regulation mandate (or, soon-to-mandate) for your industry? What does your materiality analysis or assessment show? How about raters & rankers? While it’s unlikely that you’ll appease all parties across the same topics, focus on the commonalities that matter most between these groups: commitments to science-based targets, materiality disclosures, and accurate tracking for your communicated goals. Consider third party assurance. And make sure all your disclosures align, not just once a year in your sustainability/ESG report, but across external and internal communications.
3. When you’re ready to share your sustainability/ESG progress, share what’s necessary.
While explaining your hopes and ambitions may signal effort, making exaggerated or unverifiable claims about environmental benefits can be misconstrued as greenwashing, adding fuel to any potential anti-ESG fire. To avoid this, share formal goals that are science backed, or at the very least, concrete and measurable. Use your goals and their progress, as well as how your company responds to evolving situations as an opportunity to build your brand’s health—with critics and key stakeholders. Address the priority issues you undercover, provide business rationale and the financial implications of your ESG initiatives. You don’t need to be perfect, you can talk about setbacks and progress.
4. Know the difference between a critic and a cynic.
Criticism can be a good thing, especially when it’s from your key stakeholders. It can help you understand your business’ blind spots. On the other hand, a cynic is someone who is diametrically opposed to your existence, no matter what you do. There’s a distinct difference between the two and while you can glean a greater understanding of what you shouldn’t be doing from both, it’s important to react to only to responsible criticism.
It’s never easy to address challenging issues in politicized times. But build trust through transparency. Using even one of these strategies, you’ll establish better communication and build trust with your stakeholders, and with luck, reach a few honest critics.
How Ideas On Purpose Can help
If you’re having trouble figuring out how to communicate tough topics to your stakeholders, consider engaging an expert. Communication, especially during challenging times, is integral to the work we do. Check out some of the stakeholder-pleasing sustainability reports and impact communications IOP has created — and email us to get in touch if you need help with yours.
Photo by Annie Spratt on Unsplash