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Communicating ESG: What do marketeers really think?

31.07.24

By Chris Bowman, Energy and Industrials

Aspectus Group has conducted new research to discover what communications and marketing professionals really think about ESG. In this blog, we offer a taste of the key findings. Download the full whitepaper here.

ESG: love it or loathe it, the three little letters are firmly embedded in the alphabet soup that is the business communications lexicon.

However, while most discussion of the topic (rightly) focuses on the real-world, operational applications and implications of business’ environmental, social and governance practices, it can pose as particularly thorny challenges for communications and marketing professionals.

After all, if criticism is often levelled at companies for the gap between what they say they’re doing and what they’re actually doing with regards to ESG, then surely those people tasked with doing the saying shoulder a key part of that risk.

Of course, companies must first and foremost walk the walk with respect to ESG performance, but they then have the challenge of appropriately communicating that performance in such a way as to avoid greenhushing or greenwashing (see our previous whitepaper for more on how [1]).

With this in mind, it occurred to us that these voices were largely absent from the conversation around ESG, and that this ought to be rectified. Do marketeers see ESG as more of a risk or opportunity? Do they have the resources they need to communicate effectively on the topic? And, at the end of the day, do they really believe in it?

These were some of the key questions we wanted to answer with our new whitepaper: Marketing ESG in 2024: Risks, Rewards & Riddles. To do so, we surveyed 418 senior marketing decision makers across our core sectors (energy, financial services and technology) and regions (APAC, Middle East, UK and US).

Here’s a taste of what they had to say.

ESG marketing: Risk or opportunity?

Brass tacks: is ESG more of a risk or opportunity for marketeers? The case can be made either way. On the one hand, companies that are percieved as high-performing on ESG metrics can reap great rewards. A 2023 joint McKinsey/NielsenIQ study [2] found that products in the consumer packaged goods sector making ESG-related claims “averaged 28 percent cumulative growth over the past five-year period, versus 20 percent for products that made no such claims” – and as our own Ellie Jackson would tell you [3], what holds true in consumer marketing generally applies to B2B, too.

On the other hand, the risks of getting it wrong are obvious, and Clarity AI found [4] that ESG contoversies lead to a 2 to 5 percent stock underpeformance after six months. Needless to say, no marketeer wants that to come up in their annual review.

So which view is predominant? Does excitement outweigh trepidation, or do the risks overshadow the rewards? In truth, the two are finely poised: 33 percent see ESG as more of an opportunity, and 32 percent as more of a risk. The devil, of course and as always, is in the detail, with differences emerging between sectors and regions – you’ll have to read the whitepaper to learn more.

The real risks of greenwashing

Though the ‘G’ in ESG stands for governance, the G-word for the topic – the one that looms large and casts a shadow over everything – is ‘greenwashing’.

Greenwashing is defined by Investopedia [5] as “the act of providing the public or investors with misleading or outright false information about the environmental impact of a company’s products and operations”. More colloquially, it is used to refer to any overclaim with regards to ESG performance, whether environmental, social or governance related.

No marketeer wants to catch a case for greenwashing, so it is concerning that 39 percent of our respondents said there had been ocassions where they have had to communicate around ESG for their organization (or on behalf of their clients) when they have not felt that the message was fully justified or appropriate.

Let’s be clear: we did not ask respondents whether they had engaged in greenwashing, and we are not accusing anyone of willfully misleading their audiences – we have a higher opinion of our peers than that! However, what this does show is that marketeers are routinely put in positions where there is a real risk of inadvertant greenwashing, and other findings support the view that these professionals are not always given adequate support or resources to communicate on these topics with confidence.

Is ESG here to stay?

At the end of the day, is ESG a passing trend or a change to the way we do (and communicate about) business?

Marketeers are clearly bought-in on a personal level, with more than 60 percent caring about ESG factors. However, that doesn’t mean they see the concept as the finished article– 47 percent think it will either subside or disappear, and only 9 percent believe it will become a permanent fixture in how businesses operate.

However, 28 percent think ESG is more likely to evolve than disappear altogether, and this is amplified by respondents’ views when asked about the specific term ‘ESG’, and whether it is fit for purpose. While only 18 percent think the term works well, 22 percent thinks ESG marketing needs clearer messaging, and 23 percent think it needs a new name.

There are clearly challenges for marketeers ahead.

The bottom line

Communications and marketing professionals as a whole seem bought into ESG, but they are not naïve. They understand the opportunities and the risks alongside the subtleties of the concept that require careful and constantly evolving communications strategies. However, despite operating at the frontline with regard to organizations’ reputational risk, they are not always supported in a way commensurate with the delicacy and difficulty of the task.

At Aspectus, we hope to change that. Read more about our ESG communications services here.

Key takeaways

Q1: Do marketeers see ESG more as a source of opportunity or risk?

A1: Overall, the answer is finely poised, but differences emerge across sectors and regions.

Q2: Are marketeers properly supported in communicating around ESG?

A2: Not always, it appears. And many have felt pressure to communicate messages they are not confident are fully justified.

Q3: Does this mean marketeers are greenwashing?

A3: It means there is a risk of inadvertently doing so. We don’t believe the data shows widespread or intentional bad practice, but more needs to be done to reduce the risk.

Q4: Is ESG just a passing trend?

A4: It appears not, but that there is plenty of room (and need) for it to evolve.

Q5: Where can I learn more?

A5: So glad you asked – download the full whitepaper for the results or get in touch and we’d be happy to discuss.

About the author

Chris co-leads Aspectus’ ESG practice and is an associate director responsible primarily for client strategy and content. He has worked across Aspectus’ energy and financial services teams for over a decade, and is duly immersed and well-versed in everything from ESG to the energy transition.