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 âgreenwashingâ 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 âdo the right thingâ 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 â 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 âlarge business effectsâ (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.
 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
Many organizations execute this well. A purposeful vision, incorporating terms such as âa leader in a better worldâ or a description of the companyâs 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 organizationâs north star. Ahold Delhaizeâs 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 âeat well, save time, live betterâ. The purpose identifies the difference the business wishes to deliver: to make customersâ lives easier; increase access to affordable healthy and sustainable produce; and have a positive impact on the businesses, communities, and colleagues they serve.
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;
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 companyâs purpose â âFreedom to move in a personal, sustainable and safe wayâ â 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 â think of adrenaline and excitement âreflecting instead on the companyâs commitment to climate neutrality. The creative work takes the audience on a tour of Volvoâs 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.
A transition to net zero involves collaboration and transformation that encompasses colleagues, products, operations and business partners. To fulfil an organizationâs 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.
Volvoâs 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:
 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 itâs three pronged strategies is to eliminate waste before it happens, therefore itâs 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.
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 Delhaizeâs value creation model is able to tell a coherent story that sets out its vision, âcreate the leading local food shopping experienceâ. The groupâs 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;
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.
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