By Sukanya Chakraborty, chief communications officer, VFS Global
Investors and consumers’ attentions have recently been focused on companies’ ESG components, making sustainable investing go beyond being just a buzzword. A 2020 survey carried out by HSBC revealed that 41 per cent of regional investors in the Middle East wished to adopt an effective ESG investment policy. A report by PWC, released in May 2022, added that diversity and equality, climate change and safety are the top three sustainability priorities of companies in the region.
Having said this, there is still a long way to go before brands realise the full potential of a solid ESG strategy and how it will affect the message that it sends out to the consumers and the market. Brands have still not fully understood the impact of ESG on economic value creation and competition, and as a result they miss out on a significant value driver.
To successfully convey their plans and goals, companies require a comprehensive communication framework. An effective ESG communication plan will help stakeholders better understand the long-term effects of their investments. At VFS Global, we released our integrated report in June, capturing the organisation’s sustainability strategy based on five pillars aligned to the organisation’s business strategy, the United Nations (UN) Sustainable Development Goals and national priorities: contributing to sustainable economic growth; delivering good governance; nurturing our colleagues; protecting our environment; and supporting our communities.
Developing an effective ESG framework
Developing a course of action for the ESG framework ought to start with understanding the target audience. In a world as vulnerable as ours, focus areas and challenges do see a change, in sync with evolving social conceptions and demographics. Therefore, to create an ESG framework, it is crucial to comprehend the value systems of the company’s target market. Communication professionals must also proactively convey the organisation’s ESG objectives and the steps being taken to achieve them to help stakeholders understand the relevance of the framework for the company. The best way to do this is by determining the statistics that the target audience wants to see and establishing a framework that aligns with the company’s purpose and values. Be open to various metrics that inform your ESG story to stakeholders while also making sure they are material, comparable and reliable.
A perfect example is the tech giant Apple. The brand has announced in its Environmental Progress Report (2022) that 20 per cent of all substances used in Apple merchandise in 2021 had been recycled. Apple has performed this by introducing licensed recycled gold into its merchandise and enhancing its efforts by using alternative materials. According to a report by Gulf News, the ESG market is poised to hit $53 trillion by 2025, and the UAE has established its commitment to ESG through its Securities and Commodities Authority. This body has drafted requirements requiring organisations listed in Dubai and Abu Dhabi to report ESG figures, in accordance with Global Reporting Institute standards.
In the past two years, the virtual world has strengthened the relationship between the target audience and their favourite brands, all thanks to influential storytelling and impactful ESG messaging. It shows how a brand can efficiently connect with its audience by combining the two.
Communicating an effective ESG framework
In today’s digital age, communication professionals need to be aware of the plethora of channels available and adopt a multichannel approach. The secret behind successful messaging is to look at the importance of each channel individually to see if it fits with your overall communications strategy. Most brands have mixed audiences, with online and offline preferences, making a multichannel communication approach a more effective way to deliver the company’s ESG messaging without losing out on any key stakeholders.
Additionally, brands must encourage their workforce to actively participate in sustainable behaviour. For your story to be authentic, sustainability and ESG must become the purpose of any organisation. Owning the experience is one of the best ways to engage and encourage employees to develop their ESG and sustainability campaigns at their regional workplaces and collaborate on successful initiatives. A bottom-up, decentralised strategy can be very effective.
Overall, the key lesson for organisations is to not let the challenges of communicating on ESG intimidate them. Finding a topic that matters to the business and employees as well as being transparent and engaging with the outside world is essential. As we move forward, brands need to work towards moving the needle from storytelling to story doing.
