Today, businesses increasingly recognize that their commitment to sustainability can distinguish them from their competitors. Customers, with growing environmental consciousness, are allowing their understanding of sustainability issues to guide their purchase decisions. Likewise, potential employees often consider a company's sustainability track record as a deciding factor when choosing their next employer. In line, investors are shifting their investments towards companies that exhibit strong performance in environmental, social, and governance (ESG) areas.
Concurrent with these trends, regulatory authorities are introducing a new disclosure requirements for businesses. This heightened level of transparency provides a clear window into a company's sustainability initiatives.
Within this context, the manner in which a company communicates its sustainability efforts becomes crucial. As companies aim to bolster their sustainability credentials, they need to tread cautiously to avoid accusations of greenwashing, potential regulatory issues or, even more damaging, inaction.
The challenge of communicating your sustainability efforts is to strike the right balance to authentically, and transparently convey your sustainability journey. At one extreme end, when a company 'greenwashes', it either overstates or falsifies the environmental benefits of its activities, services, or products to appear more environmentally friendly or to divert attention from potentially harmful operations. At the other end, this fear of being accused of greenwashing has led some companies to understate their green efforts, a practice known as 'greenhushing'.
In response to these concerns, the EU Parliament passed a directive on May 11, 2023, to combat deceptive environmental claims made by organizations. Phrases such as 'environmentally friendly', 'natural', and 'biodegradable' might be restricted unless they're substantiated by robust evidence. This might require the verification of eco-friendly product labels before they're released to the market. This, coupled with other recent regulations like the SEC’s proposed climate reporting rules in the US and the EU’s Corporate Sustainability Reporting Directive (CSRD), is creating a more unified standard for assessing our communications.
To comply with these evolving standards and to meet stakeholders' increasing demand for transparency, companies need to meticulously manage their communications strategy. This includes not only finding the right balance of communication but also ensuring consistency across all channels of communication.
Communicate authentically! Your story should closely mirror your sustainability strategy and implementation efforts. This is a company-wide effort, so your communications should start internally so that your team is equipped to consistently convey your sustainability efforts to external stakeholders.
At Keslio, we help companies shape their sustainability communication strategies. Here are three important considerations to maintain authenticity and relevance to stakeholders groups:
The extent to which organizations integrate environmental aspects into their core operations can differentiate them, provided that they communicate this consistently. For genuine communication, your narrative should mirror your long-term business strategy. Therefore, your sustainability plan must align closely with your broader business objectives. Consequently, it's vital to navigate through the stages of formulating and executing a sustainability strategy first before determining your communications approach.
Companies that achieve sustainable milestones don't allow fears of greenwashing to impede innovation. Authentic stories that focus on people and their purpose are likely to resonate with a diverse audience.
Regularly updating your environmental, social, and governance (ESG) materiality assessment provides valuable insight into your stakeholders' concerns. A comprehensive materiality assessment can go beyond mere regulatory compliance and significantly shape your communication strategy, provided you pose the right questions. Crucially, stakeholder interests and informational needs evolve, such as the currently heightened focus on understanding supply chain operations. These changes present a chance to actively engage with your stakeholders and guide them through your sustainability journey.
Different messages may resonate differently with diverse audiences, emphasizing the need to test and validate your communication strategy. Initially, form an internal communication strategy to cultivate a robust team of advocates and set the foundation for your external communications. Once a communication strategy is in place, amass a collection of resources that substantiate various sustainability aspects and use them to create engaging content across all channels. This approach eliminates the need for your teams to continuously create fresh content from scratch, thus reducing the risk of erroneous statements. Instead, you will have a fluid selection of strategic messages that align with your mission and steer your leaders in all their internal and external communication endeavors.
Once your strategy and communication plan are set, it's vital to educate your employees about the underlying rationale behind it. Conducting internal workshops offers two primary benefits – you bring your company along on the journey towards more sustainable operations, which can often involve significant changes – and you ensure you don't make claims your strategy can't deliver on.
The effectiveness with which companies convey their progress on sustainability significantly influences risk management and reputation management. Ensuring that sustainability communications are consistent and rooted in technical credibility will determine your success.
At Keslio, we are deeply passionate about sustainability, equipping us with the expertise and extensive network needed to guide clients through their sustainability journey effectively and efficiently. Our expertise is particularly valuable for companies looking to embed sustainability practices into their businesses and investors looking to integrate ESG and impact into investment portfolios. To learn more about how Keslio can assist your organization on its sustainability journey, please don't hesitate to get in touch with us.
