ESG and brand go hand-in-hand

Our industry has seen companies communicate new visions, pledges and promises in order to prioritise, standardise and invest in sustainability and ESG.

The “climate treaty” has communicated ambitions and measures for climate-positive action, which we have all seen as headline news, providing companies with a platform to set benchmarks and lay down the gauntlet for their competitors.

So, why are we discussing this – in what we are labelling as a brand article?

An exciting prospect and opportunity are posed to a brand, and its key stakeholders, when there is a balancing act of the triple bottom line – where environmental, social impact and profit are all of equal importance.

Brands are seeking accreditation and grades – with listings on indexes such as the FTSE4Good as an example. This movement is looking to set the shape of the future and demonstrate the importance of ESG across every element of a business. This is a critical opportunity and responsibility for all businesses, but it is especially important and expected to form a position, take action and communicate it.

If a brand is communicating a future position that touches on a desired ESG contribution, then it is imperative that its purpose statement, vision, mission and core values reflect this. Leading on from this, a brand’s operational behaviours and communications will align with this focus, bringing the core ESG strategy and ambitions to life.

As stated in other articles discussing ESG, brands want to avoid ESG becoming a bolt-on initiative, also referred to as greenwashing, as this only creates confusion for stakeholders, which will have a damaging effect on your brand reputation.

From reviewing corporate communications and investor engagement tools, we are seeing many clients and other listed companies provide various levels of commitment to making a positive difference across climate change and social initiatives.

It is now clear that many organisations are not revisiting who their key audiences are for their brand with ESG narratives being a focus area of development. There is also a need to understand whether an organisation’s purpose, vision, mission statements and values are relevant now that ESG ambitions and values have been added to the mix.

Ensuring that all of these attributes align and are integrated within the organisation and its communications are critical if it is to be received as authentic and supportive of future strategic goals and business growth horizons. And if it isn’t? There could be potential for brand soup, as two narratives and different focuses battle it out for prominence.

Combining big ESG ambitions and promises of change, coupled with uncertainty and global economic challenges, your brand could be the engine that supports you and your people, and drives your business forward a long way.

Having a brand purpose is not something new, when defined and a consensus is achieved – at both a leadership and cultural level – it is proven to positively impact business performance and brand reputation.

However, revisiting brand strategy fundamentals isn’t enough. Your brand in action is what your audiences are looking for. Revisiting your brand strategy to ensure it is still relevant, is an exercise only in creating consensus and defining an ethos that will look to support the direction and actions of your enterprise through the short to long term.

One size does not fit all. Stay focused on what is material to your organisation. The defining of ambitions and actions have to communicate progress, how you are developing connections and create a sense of belonging. ESG for large companies should support ideals and stories of doing the right thing, community, trust and an enriching contribution to society and its stakeholders. But keep in mind who this needs to engage with, the type of business you are and the markets you operate in.

With your new ESG lens you should evaluate:

• Who your top three stakeholders are. Do any materiality assessments or interactions with them change who you should now consider to be your top three?
• What the challenges are that stand in the way of delivering your ESG ambitions. Understanding this will clarify whether you need to update or rethink your brand strategy and, potentially, your brand identity.
• What the growth opportunities are, to ensure your brand stays relevant for the long term.
• What your competitors are leveraging through their ESG initiatives to develop and maintain their competitive advantages. Have they placed ESG initiatives within their business model and, therefore, evolved their value creation capabilities and opportunities?

From these insights, you can evaluate your brand's purpose, vision and mission. Are your brand values still relevant? You want to ensure that your brand messaging promotes the right actions and outcomes that align to your group and ESG ambitions and goals. Investors, colleagues and consumers see through a segmented approach to communication and company strategy. Consider a roadmap that examines a multi-year approach and how you can iteratively move your communications forward.

You will need to maintain an open-mind and agile approach as frameworks continue to evolve. The end of 2022 may see the outcomes of a consolidated integrated framework that provides one consistent framework for those companies who want to embrace an integrated thinking and reporting approach.

It is more important than ever to tell your business story, communicate your business messages and ESG narratives, and reflect the group’s investment value, competitive advantage and long-term position.

An aligned approach will allow your brand to focus its story towards your key audiences and ensure the positive impact you outline and deliver on is engaged with, in the most effective, efficient and positive way. As with all of these communication challenges and opportunities, this is a journey. Ensuring that the financial proposition and contribution to environmental and social is seen as part of one clear and concise message, will always be the goal.

Two clear examples of brands beginning to take ESG issues into their own hands and overtly build for the future:

• Patagonia’s owner gives away the company, in order to invest all of its profits into saving the planet.
• Apple’s commitment to supporting California’s housing crisis, investing $2.5 billion to improve availability and affordability.