The role of PR in ESG agendas

Smart Group • August 21, 2023

As PR professionals, we’re not responsible for creating ESG strategies. Our role is to help the organization communicate them as truthfully as possible.

To establish the ESG agenda in an organization needs experts in different areas and a well-structured project. Therefore, our objective here is not to delve into how to create the strategy, but rather to share our thoughts on how to communicate the ESG agenda.

However, PR professionals should know the pillars, the history, the impact, the risks, and to understand how to communicate ESG. So let's get started.

The three pillars that make up the ESG concept are:

Environmental: climate change, greenhouse gas emissions, environmental preservation, energy efficiency, water management and biodiversity.
Social: employee health and safety, working conditions, diversity, equality, inclusion, engagement, and customer satisfaction.
Corporate governance: anti-corruption measures, diversity at the board of directors, cybersecurity, privacy policies and management structure.

ESG History

The ESG concept emerged in the early 2000s as a United Nations (UN) initiative and today it is considered a worldwide requirement for organizations.

In 2015, the United Nations (UN) announced a sustainable agenda for 2030, with 17 Sustainable Development Goals (SDGs). They help measure and evaluate ESG-related initiatives.

The impact on various stakeholders

A recent survey by Global Corporate Reporting and Institutional Investor, from the EY consultancy, found that 78% of surveyed investors think that companies should make investments that address relevant ESG issues for their business, even if this means reducing profits.

A report published by PwC in 2020 revealed that 77% of institutional investors plan to stop allocating funds to companies that do not adopt ESG initiatives. Therefore, we reinforce once again: it is essential to keep the ESG and Public Relations agenda on the same page.

ESG is literally gold. The financial market uses social, environmental and responsibility parameters to classify and make investment decisions.

Investors are increasingly paying attention to the actions of corporations that aim to minimize their impact on the environment, build a fairer and more responsible world and to maintain exceptional management processes.

The voice of the consumer also speaks loudly, and it is valuable. A study published in2021 by the Canadian company OpenText points out that 83% of consumers intend to spend more on a product if they know that they come from a company with ethical practices.

Another relevant piece of information also obtained in a study by PwC, shows that ESG plays a decisive role in retaining talent, one of the great challenges of today. The same survey reveals that 86% of workers prefer to work in companies that are truly concerned with issues related to social causes of sustainability.

Despite the diversity of objectives and languages, stakeholders are increasingly connected and critical, so caution is required.

Greenwashing: an avoidable risk

Greenwashing is about making the company appear more committed to ESG than it really is.

You might think that this would never happen at your company. But just look at the list of companies that were accused of greenwashing in 2022 to understand that it can happen even to reputable companies. On the list are Coca-Cola, H&M, Unilever, Ikea, and Shell - serious companies with strong reputations that had no need to take risks.

Why do companies fall into this trap?

The most skeptical may be fast to blame the pursuit for profit. But that is not always the case. Often the ESG team, HR and leadership are proud of the decisions they've made and want to share them with the market.

What to do in these situations?

Take a stand! Share this blog, don't be quiet. After all, your own professional reputation may also suffer.

The Spanish agency Akepa, specializing in ESG, recently published this guide on how to identify greenwashing risks.

We've summarized it here:

Beware of vague concepts such as “conscious consumption” or “inclusive company” unless the company has a structured program to prove the statement.
Avoid communicating details that are important for the company but may be considered irrelevant and too small compared to market practices.
Don't overdo the numbers and percentages, the truth always comes out.
Admit your organization’s vulnerabilities. For example, if the theme is equality and your company has only one woman on the leadership team, assume this in the communication and explain what the company is doing to change the scenario.

There’s no doubt that the number of people interested in knowing what brands have to say about urgent issues facing humanity is increasing. Here we share some tips on how to communicate ESG topics.

5 PR tips about how to communicate ESG

Narrative - develop a clear and interesting text that describes your company's commitment to ESG.
Internal communication comes first - easy to say, hard to do when you have the hierarchical pressure to communicate as quickly as possible. Be patient! Explain that employees are credible spokespeople, if they’re not convinced of the company's commitment to ESG, this may impact the credibility of your ESG messages.
Transparency - If your company isn't willing to talk about its skeletons in the closet, don't even start talking about ESG before solving all the issues. For every sector of the business, there are organizations or interest groups watching over what we communicate. Remember that if your company is accused of greenwashing, its reputation will suffer.
Clarity - ESG topics have a language of their own that needs to be simplified to ensure understanding for all audiences. Avoid using unfamiliar words.
Consistency - annual sustainability reports are the main tool for disclosing a company's ESG initiatives, but they’re not enough. You should be consistent and show that the company pays attention to corporate responsibility issues throughout the year.