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Sustainability

How to win trust in your ESG communications and marketing

Published 10 March 2022 in Sustainability • 8 min read

Let your CMO be your Chief Sustainability Officer, says Richard Benton, as he outlines the ways in which organizations must urgently improve their messaging around ESG.

Today’s businesses need to convince multiple audiences of the validity of their sustainability credentials, and yet many are failing to do so. However, there are some concrete steps that they can take to get their message across effectively and avoid “greenwashing” in their marketing and communications.

As countless surveys show, customers, employees and investors all want companies to play a leading role in societal change, sustainability and the transition to net zero.

The 2022 Edelman Trust Barometer, built on a general population survey of more than 36,000 people in 28 countries, found that 58% of consumers will buy or advocate for brands based on their beliefs and values, 60% of employees will choose a place to work on the same basis and 64% of individual investors will invest in companies based on similar considerations. At the same time, 52% of respondents said they want businesses to do more to tackle climate change, while 68% expect CEOs to speak out and inform policy debates on the issue.

Meanwhile, Edelman’s 2021 Trust Barometer special report on institutional investors found that the overwhelming majority of such investors believe that companies that prioritize environmental, social and governance (ESG) initiatives offer opportunities for better long-term returns and merit a premium valuation.

Trust in organizations to ‘do the right thing’ varies widely. In Britain, for example, a YouGov survey of 3,000 energy customers for marketing agencies collective The Mission Group, providers scored particularly poorly, indicating that customers do not believe that they are tackling ESG issues effectively – and purpose-driven campaigns often do not work.

The UK Institute of Practitioners in Advertising last year compared 47 purpose-driven campaigns against 333 non-purpose campaigns and found that the standard campaigns generated 45% more ‘large business effects’ (sales, market share, customer acquisition/loyalty, pricing power and profit) than purpose-driven ones.

So, how can businesses do better in their communications and marketing on sustainability issues?

Above all, they need to follow a systematic process to ensure the authenticity of their sustainability messages. Here are seven steps that organizations can take to build a compelling sustainability message.

How to craft and sustain the right message

1. Identify what’s material

 ESG factors are not ubiquitous to organizations and if a business tries to communicate positive action against each factor, the message will be lost in a sea of continuous improvements. It must identify which factors are most materially relevant to their organization or category and decide where it must perform highly to have a positive financial and societal impact. For example, the Dutch multinational grocery retailer Ahold Delhaize identified the most material ESG risks relevant to their organization to be: fair labour practices in the supply chain; product transparency; sustainable agriculture; and sustainable packaging

2. Define your purpose

Many organizations execute this well. A purposeful vision, incorporating terms such as ‘a leader in a better world’ or a description of the company’s products or services, is not enough A truly purposeful vision has a clear definable outcome that relates to an issue or societal goal and serves as the organization’s north star. Ahold Delhaize’s leaders recognize that consumers demand greater convenience, have a heightened interest in health and sustainability, and support local communities and businesses. Their organizational purpose is described as ‘eat well, save time, live better’. The purpose identifies the difference the business wishes to deliver: to make customers’ lives easier; increase access to affordable healthy and sustainable produce; and have a positive impact on the businesses, communities, and colleagues they serve.

3. Embed the purpose

The purpose must be connected to ESG factors to drive demonstrable actions which are manifested in all facets of the organization through the business strategy. This process must be led and instigated by the CEO and supported by the CMO, who can arguably act as the chief sustainability officer. By identifying what really matters to customers and society, while mapping ESG materiality, the CMO can help to define a compelling purpose. Once embedded, the purpose galvanizes action and enables the business to pivot around a prevalent issue.

Ahold Delhaize defined four growth drivers that help to fulfil their purpose and achieve their ambition through organizational activities;

  • Drive omni-channel growth – create seamless digitally enabled experiences
  • Elevate healthy and sustainable practices – inspire healthy and affordable food options and achieve sustainability commitments
  • Cultivate best talent – attract, deepen, and retain inclusive talent that drives high performance
  • Strengthen operational excellence – save for customers, leverage scale and use technology and data to build for the future

4. Communicate who you are

The defining difference for consumer choice will no longer be just product or brand but how the organization delivers value and operates its business. Revealing the transition strategy to adapt and mitigate the environmental and social risks or opportunities it faces will build an authentic coherent story. Telling the story through customer communications and evidencing by action or product will earn trust by introducing transparency and authenticity to the message.

Volvo Cars is one of the first traditional automakers to recognize this opportunity. The company’s purpose – “Freedom to move in a personal, sustainable and safe way” – reflects its ambition to be a leader in responsible business, a fully electric car company by 2030 and climate neutral by 2040. A new global campaign abandons traditional brand platforms – think of adrenaline and excitement –reflecting instead on the company’s commitment to climate neutrality. The creative work takes the audience on a tour of Volvo’s safety tests over the decades then switches to the artic circle and asks whether a 100ft drop is the ultimate safety test. A collapsing glacier provides the answer, demonstrating how the biggest threat to safety now comes from climate change.

5. Educate via customer and stakeholder engagement

A transition to net zero involves collaboration and transformation that encompasses colleagues, products, operations and business partners. To fulfil an organization’s purpose and ambition, it must be able to demonstrate how it will create value for each stakeholder. If each stakeholders understands the value they provide and how those factors interrelate the business will be earn greater confidence and trust through highlighting the positive impact they deliver for people, planet and profit.

leather free material
Volvo Cars' new leather free material for its next generation cars consists of textiles made from recycled material such as PET bottles, bio-attributed material from sustainable forests in Sweden and Finland, and corks recycled from the wine industry

Volvo’s stakeholder engagement can demonstrate how their purpose and business strategy is rooted in creating value for shareholders, employees, customers, societies and business partners in the following ways:

  • Shareholders – premium growth and profitability to deliver financial value and fund strategic investments.Employees – profitability helps create job security, pride and confidence. A commitment to sustainability, safety and making customers lives easier helps colleagues to contribute to a shared vision and be part of something greater than themselves. Customers – making lives easier, Scandinavian design, highest safety standards, and environmental impact, intuitive technology and convenience.
  • Societies – providing jobs, paying taxes and supporting the local economy. Being part of the solution on road safety and creating cleaner more enjoyable cities with a reduced carbon footprint.
  • Business partners – a clear symbiosis exists between Volvo and its partners across its distribution and supply networks. Increased sales yield a positive ripple effect on shareholders, employees, and business partners.

6. Empower and report

 Organizations can increase customer engagement by empowering them to participate in behavioral change and share organizational milestones and objectives. Ahold Delhaize recognizes that one of the most meaningful methods to reduce carbon emissions is to eliminate food waste. The business has therefore set an objective to deliver a 50% reduction in food waste by 2050. One of it’s three pronged strategies is to eliminate waste before it happens, therefore it’s introducing electronic shelf labels to enable discounting of food nearing its sell-by date. To help customers make healthier and more sustainable choices the business is also driving transparency about the origin of fresh products and the nutritional value of all products. These are two examples of how Ahold Delhaize is empowering and influencing consumers, to change their consumption or purchase behaviors, and play an active role in the achievement of their environmental goals.

7. Ensure that you have a joined-up message

An effective communications strategy must have emotional appeal, set out by the purpose which is then reinforced with rational reasons to believe. Purpose-driven campaigns can convey sustainability strategies and ESG attributes. However, there must be clear tangible linkage between purpose, ESG factors and the actions or initiatives that aim to address them.

Ahold Delhaize’s value creation model is able to tell a coherent story that sets out its vision, ‘create the leading local food shopping experience’. The group’s purpose defines the difference it wishes to make for customers and society, and their four growth drivers define how this is realized through the business strategy. The specific risks associated with the business and its operations have been identified and correlated to material ESG impacts with specific metrics and mitigation activities. The related growth driver has then been identified to connect the overall business strategy to material ESG factors and relevant sustainable development goals.

For example;

  • Product transparency – ensure transparent and traceable product information regarding origin, environmental and social impact.
  • Approach – empower customers to understand the nutritional value and impact of their shopping decisions and enable them to make choices that match their needs and values
  • Delivery – adoption of latest technology, blockchain, artificial intelligence to bring more transparency and personalized information for customers via loyalty apps or online advice.
  • Metric – 100% own-brand seafood product sales with identified farm fishery origin by 2020
  • Growth driver and SDG – elevate healthy and sustainable, responsible consumption and production.

Organizations using this systematic approach to build their communications for multiple audiences will be able to tell a convincing story of how their business can profitably solve a set of problems relating to people and the planet.

Authors

Richard Benton

Consultant for Rouleur Marketing Ltd

Richard Benton is UK-based consultant for Rouleur Marketing Ltd. He has previously served as Head of Marketing at Barclays Wealth Management, Investec, Brit Insurance and Royal London UK Life. He is an alumnus of both IMD’s Leading Digital Business Transformation and Transform Technology programs.

Richard Benton

Consultant for Rouleur Marketing Ltd

Richard Benton is UK-based consultant for Rouleur Marketing Ltd. He has previously served as Head of Marketing at Barclays Wealth Management, Investec, Brit Insurance and Royal London UK Life. He is an alumnus of both IMD’s Leading Digital Business Transformation and Transform Technology programs.

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