Your Environmental, Social, & Governance Plan is a Reflection of Your Brand & Should Be a Top Business Priority
It used to be that business was all about the quality and uniqueness of one’s product or service and how well it met the needs of customers. But as Dylan would sing, “the times, they are a-changin,” and they have been for some time now.
It’s not solely about what you’re selling anymore; it’s also about what your company stands for and its impact in the world. More than ever, people want to do business with brands that share their values concerning everything from the environment, to social issues, to ethical employee practices. This is especially true of younger generations including millennials and Gen-Z.
In a 2022 global consumer report, over half of Gen-Z said companies should take a stance on social issues and were more likely to purchase from a company that treats its employees well.
It’s no wonder why many companies today are devoting valuable time and resources to developing a comprehensive environmental, social, and governance (ESG) strategy — a set of practices to guide and evaluate a business’s operational performance as it relates to social and environmental issues. ESG touches nearly all aspects of a company’s dealings, including corporate social responsibility, corporate sustainability, regulatory compliance, social impact, stakeholder engagement, and more.
From establishing transparent and ethical supply chain operations to promoting employee health and safety, an effective ESG plan works in tandem with your marketing and communications efforts to build trust between your brand and your customers, investors, employees, and the general public, and is a key to creating a loyal customer base and workforce. Don’t know where to start with yours?
Here are 5 important things to consider when developing your ESG strategy:
1. Identify Your ESG Goals
One of the first steps you need to take is to set specific, relevant, achievable short- and long-term objectives that revolve around the three ESG categories and reflect your organization’s overall vision. Setting and achieving ESG goals is key to developing a strong ESG strategy.
A recent survey questioning Fortune 50 Companies found that the average business had 17 ESG goals which involved actions such as reducing business greenhouse gas emissions, water and energy conservation efforts, investing in sustainable energy, and providing transparent financial practices.
Making sure the results of these goals are trackable, measurable, and time-bound are essential for success and accountability. For instance, one long-term goal could be to reduce water consumption by 10% over 5 years, while a short-term goal might be to immediately change product materials or ingredients to more sustainable or natural options.
2. Assess Your ESG Risks & Uncover Opportunities
When implementing a specific strategy, it’s important to first weigh potential negative and positive impacts on your organization and its bottom line. To get a better grasp on which ESG actions to prioritize, you’ll need to examine everything your business is involved in, especially those activities specific to your industry, so that you can head off any problems that may arise concerning your ESG.
From current issues the public is suddenly focusing their attention on, to blind spots and vulnerabilities your company needs to address now before it’s too late, continually identifying and assessing your ESG risks is not only important to avoid being caught flat-footed but can also reveal new opportunities for you to foster responsible growth across your organization, attract better employee talent, and connect more effectively with your target audiences.
3. Understand Stakeholder Expectations & Engagement
While a brand that acts ethically and is not just in it for the big bucks is the kind we can admire and patronize, ESG is, at its core, mainly about pleasing stakeholders and showing them that you have their best interests at heart. To do this, you must first understand who your stakeholders are and what’s important to them. Stakeholders include your customers, employees, board members, investors, vendors, and others with a “stake” or vested interest in your organization.
Through diligent research and data gathering, you will need to identify a broad range of stakeholders and get valuable feedback and insight from them in order to know how to not only market to them but craft your ESG goals and uncover risks. Different stakeholder groups will have different perspectives so it’s important to know and understand them all so you can address them all in your ESG plan.
Because it’s true that you can’t please everyone all the time, it’s a good idea to prioritize stakeholders as to their importance to your business. Once you understand who your stakeholders are and their unique needs, you can develop the communication and engagement strategies that work best for each stakeholder group. With ESG especially, it’s important to have a strong crisis communications plan in place to inform and engage with stakeholders when inevitable crises occur.
4. Implement With Transparency & Accountability
After doing the research and carefully crafting your ESG strategy, it’s time to execute it with the utmost transparency and accountability. This will not only breed success but also build trust among stakeholders by demonstrating that you’re putting some of your money and resources where your mouth is when it comes to ESG.
Your internal policies and procedures as well as your external communications will need to be aligned with your strategy. Internal communications get your employees all on the same page with your ESG agenda while your external communications help alert all other stakeholders to your vision. Meanwhile, you’ll want to share all of the great things that your company is doing to impact the environment or affect social change across your multiple channels including social media, your website, press releases, and more — not just for transparency’s sake but to get the message out that you take ESG matters seriously.
Honesty and promptness are key, especially during crises when it’s vital to know when to immediately respond or when to let the air clear first before responding to critical ESG moments through official statements, releases, press conferences, and more.
5. Measure, Monitor, & Report Progress
In order to maintain a strong, effective ESG plan, you must track and evaluate your progress, making changes along the way to continually improve it. Your team will need to understand how to gather and analyze ESG metrics whether it’s energy use, water consumption, waste generation, employee safety record, or community impact and engagement. Sharing results with the public adds to your commitment to transparency whether you’re meeting goals or falling just short.
Not only will you be comparing your results with others in the industry but your stakeholders will be too. That makes it doubly important that you have an effective strategy and that you’re constantly monitoring and fine-tuning it. Customers, investors, and others may move to your competitors if they’re upholding their ESG values better than you.
In a world increasingly more concerned about the environment and what we’re leaving for coming generations, businesses can’t ignore their environmental, social, and (corporate) governance impact when competitors will use it to their advantage.
For expert help gathering the data and insight you need and crafting the best ESG strategy for your company, reach out to M:7 Agency’s master strategists and communications specialists who can get you started in the right direction.