Is ESG the new “Buzz Word”?

This week’s guest post is from Gihan Hyde, an award-winning communication specialist and the founder of CommUnique, an ESG Communication start-up. She has been implementing ESG campaigns in 8 sectors, across 6 countries over the past 15 years. Her campaigns have positively impacted over 150,000 employees, 200,000 customers, and have closed over £300m in investment deals. Some of the clients she advised included The World Health Organisation (WHO), HSBC, Barclays, M&S, SUEZ, Grundfos, Philip Morris, USAID, and the Saudi Government. Get in touch with Gihan through LinkedIn or Twitter.

The term ESG is a term widely used by investors when they are evaluating which organisations they wish to invest in. It stands for Environmental, Social and Governance. Its principals and framework is derived from the UN’s 17 Sustainable Goals (SDG). The idea behind these goals is to set a picture of … “If we are to achieve these 17 goals our planet, our people and our economies will be fundamentally changed”.

Let us start by defining ESG:

The “E” mainly focuses on how the organisation influences the environment and what it will do to help preserve it. Some of its aspects include a company’s climate impact, its carbon emission, its waste production,

The “S” investigates the company’s relationships with other businesses and communities. For example, how it is treating its clients, its workers and how diverse is its management team and workforce

The “G” is concerned with the internal company’s affairs, Diverse boards are a key component of good governance, because they take a broad perspective on the opportunities and risks facing the organisation and help deliver long-term value.

Now that we defined what ESG stands for, let’s look at some interesting data that showcases why the fintech sector should pay attention to it and what would be the result if it is ignored?

Morgan Stanley Bank recently conducted a survey that found nearly 90% of millennial investors were interested in pursuing investments that more closely reflect the values they hold.

By 2025, approximately $30 trillion worth of investment assets will be selected using a socially responsible investing strategy and according to research by asset management practice Montfort Communications it was found that

• Seventy Eight percent of 18–34-year-olds said that ESG considerations affect their investment choices compared to 67% among the 35-54 age group and less than a third, 32%, of the 55+ demographic.
• Nearly two-thirds (63%) of 18-34-year-old said they would choose a new fund manager based on their approach to ESG compared to just 17% of the 55+ age group.
• Women investors have a stronger conviction in ESG than men with over half of women, 53%, saying they would choose a new manager based on their approach to ESG versus only 37% of men.

In addition to the above data governments are continuing to enact policies that prioritize sustainability. This means businesses will be expected to communicate what part are they playing in driving the sustainable agenda if they are to be permitted to operate in certain markets.

So how can your company start its ESG journey and process?

Before you begin hiring expensive consultants and environmental experts you need to be 100% certain that sustainability and ESG reporting is a direction that your organisation will commit to.  To do so, here are a set of questions to ask yourself.

1. Do we have the right policies and procedures to support our sustainability strategy?
2. What is required from us as a company by our regulators and what is not required?
3. What are our peers doing in this space?
4. Do we have the right team to bring this new sustainability strategy to life?
5. Is our communication team fully equipped with the skillset and knowledge to support the strategy?

Once the above is answered here are my recommended shorter checklist that you need to answer before you start communicating your ESG strategies:

1. Why is our ESG Initiatives different?
2. What do we want to be known for?
3. How is our ESG strategy linked to our company’s purpose.
4. How are our ESG Initiatives integrated into our operations and how close is it to our business strategy?
5. How are we weaving our ESG messages into our business-as-usual messages?
6. Are we certain that our ESG story is credible and genuine? If so, how did we ensure this?

The above answers will help you tell a compelling ESG aka People and Planet stories. But you need to think carefully about content vs. context when designing your campaigns. Hence you need to first listen to how your audience are talking about ESG? are they talking about it from a curiosity, wanting to listen learn and grow, and claiming responsibility or from a defensiveness, or placing blame?

Once you determine what type of conversation your audience is having start determining if your audience are a “To Me” group or a “By Me” group?

The “To Me” group are the ones who believe that they are victims of what other people are doing to them… in otherwords, life is happening to them.

The “By Me” group are the ones who see themselves as creators of their experience, they take responsibility of whatever happens in their lives.

Listening, testing, and looking left while others are looking right is the key to your ESG communication campaigns success, so take your time when designing these campaigns and don’t rush to talk about them externally before you do so internally.