After COP26: comms must prep for increased focus on ESG
Following a muted outcome from COP26, during which the conference’s president, Alok Sharma, wept as he apologised to delegates, there is increased pressure on the private sector to address climate change. Where countries have sidestepped the issue, businesses will be expected to pick up the slack.
It’s not just policy-makers who will look to business either: investors are increasingly interested in ESG and – as we all know – money talks.
The role of comms is to help create, shape and tell ESG stories from within their company. Operational actions need to bring the messaging to life: in other words, messaging needs to have proof points to avoid accusations of greenwashing. There will be increasingly few places to hide as investors, regulators and climate activists alike are looking for substance, not gloss.
PwC research from September this year found nearly 80% of investors thought ESG was an important factor in their investment decision-making; with about half willing to divest from companies that didn’t take sufficient action on ESG issues.
One initiative launched at COP26 is the International Sustainability Standards Board (ISSB), which aims to put sustainability reporting on the same footing as financial reporting. A blunter way to put it would be that it will standardise the way companies report on their sustainability targets and make it more difficult to get away with ‘creative’ environmental accounting.
Regulators already seem to be clamping down on unverified sustainability statements. The FT recently reported that sneaker brand Allbirds was forced to backtrack on its claim to be the first ‘sustainable’ IPO, after the Securities and Exchange Commission intervened. The company’s internal messaging failed to translate externally to its audience, suggesting a lack of prep: a stakeholder audit would have flagged the risk of a frosty reception.
For comms leaders, COP26 is another roadside marker on the journey towards an increasingly activist stakeholder audience. Consumers, NGOs and investors have increased expectations from companies: piling on the pressure to deliver ESG programmes with tangible results.
Our process to help clients with their ESG messaging starts with an audit of the landscape, both internally and externally, to understand opportunities, risks, and audience perspectives. What stories do you have to tell, and will they resonate with your stakeholders? Are they stories that competitors have told already, to better effect?
One data source we use is the Worldcom Confidence Index (WCI), the first AI-driven ‘living’ global market research that measures the topics CEOs and CMOs are engaging with. As the UK partner for Worldcom, we and our clients have preferential access to the WCI. It tracks data across six regions, 42 countries, and 11 industry sectors.
On the cusp of COP26, the WCI data revealed that ‘ESG, sustainability and plastics’ was the fifth most-talked about topic among global business leaders; surprisingly lagging behind both ‘AI’ and ‘retaining talent’ as a priority. WCI will update on how COP26 has impacted ESG’s rank as a topic in the coming weeks.
Messages and stories need to be built on a solid base – and with ESG in particular, with honesty and transparency in mind. Sustainability is a journey and very few companies can say they have met all their goals. It is about acknowledging where your brand is on that journey as much as it is talking about the goals.
Working across paid-for and earned channels to tell a consistent, compelling story is important, but so is listening and monitoring to ensure it is a two-way conversation, not a monologue. The choice of spokesperson should reflect the audience: sometimes seniority is a disadvantage, and sometimes, it is more helpful to work with NGOs and influencers to co-share a story.
The whole corporate world now needs to address the ESG narrative to see how the wheels put in motion at COP26 translate into policy, regulation, and change for businesses. As we’ve said before, it’s vital that businesses get this right, and comms has an important part to play in making it happen.
Helen Fitzhugh, head of issues management.
Kaizo’s services include stakeholder audit and analysis, issues management, story development and content creation, and spokesperson training. For further information and for access to the WCI, please contact firstname.lastname@example.org.