Why Communication is Crucial in ESG and Sustainability?
ESG and sustainability are two terms that are often used interchangeably in the context of corporate responsibility and impact. However, they are not exactly the same.
ESG stands for environmental, social, and governance, and refers to the criteria that investors and other stakeholders use to evaluate a company’s performance on these issues. Sustainability, on the other hand, is a broader concept that encompasses the ability of a company to create long-term value for itself and society while minimizing its negative impacts on the environment and people.
Both ESG and sustainability are important for businesses today, as they reflect their alignment with global challenges such as climate change, social justice, human rights, and ethical conduct. Businesses that perform well on ESG and sustainability can benefit from enhanced reputation, customer loyalty, employee engagement, innovation, risk management, and access to capital. Conversely, businesses that lag behind on these issues can face reputational damage, regulatory scrutiny, consumer backlash, talent attrition, and competitive disadvantage.
Therefore, it is essential for businesses to communicate effectively about their ESG and sustainability efforts to their various stakeholders, such as investors, customers, employees, suppliers, regulators, media, and communities.
Communication can help businesses to:
- Demonstrate their commitment and leadership on ESG and sustainability issues
- Showcase their achievements and progress on ESG and sustainability goals
- Address stakeholder expectations and concerns on ESG and sustainability matters
- Build trust and credibility with stakeholders on ESG and sustainability performance
- Engage stakeholders in dialogue and collaboration on ESG and sustainability initiatives
- Inspire stakeholders to take action and support ESG and sustainability causes.
However, communicating about ESG and sustainability is not a simple task. It requires a strategic approach that considers the following aspects:
- Audience: Businesses need to identify their key audiences for ESG and sustainability communication and understand their needs, interests, preferences, and expectations. Different audiences may require different levels of detail, frequency, format, tone, and channel of communication. For example, investors may be more interested in quantitative data and metrics that show the financial implications of ESG and sustainability performance, while customers may be more interested in stories and testimonials that show the social and environmental benefits of ESG and sustainability practices.
- Content: Businesses need to craft clear and compelling messages that convey their ESG and sustainability vision, strategy, actions, outcomes, and impacts. The content should be relevant, accurate, consistent, transparent, and verifiable. It should also highlight the business case for ESG and sustainability by showing how it creates value for the company and its stakeholders. The content should avoid jargon, technical terms, or vague claims that may confuse or mislead the audience.
- Channel: Businesses must select the most appropriate channels to deliver their ESG and sustainability messages to their target audiences. The channel should match the audience’s preferences, habits, accessibility, and trustworthiness. It should also enable feedback and interaction between the sender and the receiver of the message. Possible channels include websites, reports, podcasts, educational videos, and newsletters.
Juan Carlos Giraldo, Communication and Sustainability, Boston, US