In recent years, ESG (Environmental, Social, and Governance) has emerged as a prominent subject in business. This shift is driven by changing expectations from consumers and investors, who now seek more than just products, services, and financial performance from companies.
In December 2022, PwC Canada released the company’s second Canadian ESG reporting study that assessed the ESG maturity of Canada’s top 250 publicly traded companies. “We are seeing an improvement compared to last year, however, actual progress is failing to keep pace with rising stakeholder expectations. Canadian companies are missing important opportunities to add credibility to their sustainability disclosures,” said Sarah Marsh, partner, National ESG Report and Assurance Leader, PwC Canada with the report’s release. “It’s crucial to have a clear plan of action, as the demand for transparency among stakeholders remains an imperative, and investors and supply chains continue to push for ESG initiatives.”
ESG has strategic value for organizations to evaluate their impact on the environment, society and governance. As businesses adopt ESG practices and leverage their advantages, which can translate into tangible financial gains, how can we ensure the prevention of “greenwashing” when these practices are used for marketing purposes?
More than just marketing
First, ESG is not just a marketing tool. It has to be part of your overall business strategy. Integrating ESG into your business means using it for decision making across the board. ESG helps businesses identify risks and opportunities that can create a competitive advantage when it’s done right.
“Stakeholders want more transparency of comparable and reliable information. Investors are looking to understand how a company is identifying its material ESG risks and opportunities, including the linkage to the financial implications of those activities,” said Caroline Gadbois, director, ESG Reporting and Assurance at PwC Canada when the PWC report was released last winter. “Organizations need support in the implementation of processes, internal controls, and systems to collect all ESG data to evaluate performance and measure the impact of sustainable finance. This coherent story is the difference between a compliance-based approach to ESG and one that demonstrates true value creation.”
Adopting more sustainable practices can lead to reduced costs, open new markets or drive innovation. It can also build better investor relations, create greater long-term value, improve employee attraction and retention, and contribute to overall reputation and brand value. All of these benefits also funnel into your marketing efforts. Now, how can you use them with success?
In order to be successful in ESG marketing, authenticity is essential. Consumers are savvier than ever, and can see right through marketing that isn’t sincere. Start with transparency about your company’s ESG goals and report your progress regularly and openly. Honesty builds trust and credibility with consumers that want to support responsible brands.
Your employees, stakeholders and even vendors need to believe in your ESG commitments. Involve your team in your ESG strategy to demonstrate your organization’s dedication to doing the right thing beyond the bottom line. Partnerships with like-minded non-profits and other companies can also lend credibility, build your impact and even attract new customers.
Metrics are vital to ESG. Quantify your efforts to measure your impact and share your results. For example, if you’re in product marketing, show consumers how ESG is helping you reduce your impact on the planet through things like sustainable sourcing, better manufacturing or fair labour practices. Showing progress builds momentum and trust.
Don’t be afraid
Sometimes, despite our best efforts, some goals can’t be achieved in the way we planned. That’s okay! If a goal is taking longer than anticipated, don’t hide from it. Recalibrate and share your new plans. Consumers prefer honest communication above all else, especially when your heart is in the right place.
Get it right
The key to successfully using ESG in marketing comes from authenticity, clear values and tangible actions. With those three factors, your ESG marketing can resonate with your target audiences.