From fashion to financial services, 2023 has already witnessed alleged greenwashing controversies.
As recently as five years ago, most ESG scandals arose from corporate inertia, with many organisations perceiving ESG strategy as a ‘nice to have’. Subsequently, when limited external scrutiny was applied, unethical or environmentally damaging practices were readily uncovered.
As expectations - and crucially, regulation has shifted - ESG has rapidly escalated the C-Suite agenda. Accordingly, the importance of reputation management regarding ESG has also increased. With organisations now delivering both internal and external campaigns around their commitments, new risks have emerged. Enter the ‘say do gap’, where external messaging is inconsistent with the realities of the business, or simply failing rapidly shifting societal expectations.
Organisations with successful policies drive ESG strategy from the C-suite. Care is taken to involve both subject matter experts and corporate communications in the design, monitoring, and embedding of the strategy across all activity within the firm. This approach ensures that communications campaigns are underpinned by action, governance, and reporting. Ultimately, this fosters the transition from managing ESG as a reputational issue, to an area where proactive, assured engagement becomes the norm.
Outlined below is how corporate affairs and crisis management functions can effectively communicate around this demanding subject. Enabling organisations to respond with confidence when critique does arise – assuming that a credible, robust plan is in place beforehand.
- Understand your stakeholders’ expectations: we often work with organisations whose own targets are inconsistent with their stakeholders’ – be that colleagues, lenders, clients or investors. Initiating review between these groups for their own policies will avoid the creation of communications strategies that exist in an echo chamber; which risk falling flat, or even inciting critique.
- Start now: most organisations are on a journey. While some have more work to do than others, failing to engage in the pursuit of perfection only creates an information vacuum and heightens the risk of scrutiny. This is where transparency becomes particularly crucial. Be honest about where you are now, where you need to get to, and your plan to achieve this. Not all the answers may be available now, but evidence of genuine effort and inquiry is far more effective than silence.
- Avoid complexity: while organisations should craft a specific, multifaceted plan behind each of the ‘E’, ‘S’ and ‘G’, good communications should simplify the complex for different audiences. Engagement is futile if stakeholders are left confused - or worse - feel they are being deceived through use of jargon, opaque data, or unsubstantiated claims.
- Be open when critique arises: no matter an organisation’s diligence, there is always scope for critique. Existing strategy may become out of step with rapidly accelerating societal norms, the actions of a third party, or a shortcoming in strategy. Be courageous in admitting failings. Bring the conversation back to your progress, while publically holding yourself accountable to plans you have devised.
- Embed reputation resilience: organisations with the boldest ESG stance often face the harshest critiques. This should not become a deterrence. Instead, be prepared to defend claims – have a credible, trained spokesperson and reactive, current messaging that reflects recent progresses. To test your preparedness, crisis simulations provide a candid forum for exploring the messaging and capability of your response. Crucially, this also facilitates identifying vulnerabilities in a no-risk setting.
As organisations increasingly position these actions in the forefront, this area will evolve from one of perceived potential crises that require careful management, to one providing significant reputational and commercial opportunity.