ESG transformation / Sustainability

It is not just communicators who know that ESG encompasses a very broad range of issues, including energy management, equal opportunities and remuneration issues. These matters are key to the social acceptance of a company and can determine the fate of its reputation. Proving that you have all issues under control is often a matter of communications. And building up a solid thematic foundation is a good place to start.

Let’s take a look behind the scenes of a typical listed German company. Things usually get hectic each year around the time the annual report is being prepared. Numbers, data and facts have to be compiled. Colleagues who produce these rarely run into each other in everyday working life. They are responsible for financial figures, HR figures, work in the area of compliance, are strategists, representatives of staff units, communications, etc. Few reports have the same breadth of content as an ESG report, even if it is presented in the guise of a CSR report or as an ESG key figures page in the annual report. The Communications / IR department is tasked with an extensive amount of sorting and organising.

However, figures only represent the informative and reporting side of a much more demanding communications task. Compelling external and internal communications need a framework for all the key figures and activities. This should be a narrative that articulates the company’s activities and stance and relates them to society’s expectations regarding the major issues of the future. This is the only way to create a stable springboard for effective sustainability / ESG communications. So, what does it all boil down to?

A clear sustainability / ESG profile

As with many other issues, sustainability communications are not about simply presenting activities in an appealing and comprehensible manner. Strategic assessments must be made as an initial step. Where can opportunities for building the company’s profile be found amongst the multitude of issues and what are the risks to its reputation? Where is the company capable of delivering and what are the risks? What issues does the competition address? Where are there pressing issues arising in (socio-)political discourse or in the capital market for which the company must provide answers in its ESG communications? Only those who have addressed these questions can create a profile that has a chance of being compelling (even to critics).

An overarching narrative

Besides the hard profile questions, this narrative also helps to make a company’s commitment to sustainability stand out and give it a boost. Why is sustainability a real concern? Where can compelling references be drawn to the company’s history and special qualities? What stance and mindset does this involve and how can this be linked to top management personalities? And last but not least, what is the purpose of the company’s claim?

Visible lighthouses

Ultimately, every claim and aspiration needs to be backed up with solid evidence. However, simply referring to the relevant pages of the annual report will not suffice. Rather, this evidence should take the form of communications that intelligently use lighthouse projects in order to give the company’s work credibility. It should identify management decisions that demonstrate the seriousness of the claim. Furthermore, it ought to identify (current) issues that the company can initiate a meaningful dialogue on and take a clear stance on or create a much-needed common factual basis through studies.

Sustainability / ESG communications that are designed to generate appeal externally and ensure identification internally must therefore do much more than just collect figures from different departments and colleagues. The aim should be to organise and manage the content of an involvement process that creates a common understanding of the bigger picture and the common overarching corporate goals and arranges the different activities into a narrative.