ESG communications need a makeover

Transparency may be the only way to avoid greenwashing in ESG reporting and sustainability communications

ESG communications need a makeover | An image of a green wall with chips in the paint

Vanessa Chris is a content strategist and founder of h2h content. 

If we have any chance of heeding the Intergovernmental Panel on Climate Change’s repeated warnings and meaningfully reducing global CO2 emissions by 2030, the business community will have to get serious about the task at hand. 

This will require a momentous paradigm shift – a societal reshaping of our view of business. Somehow, we’ll have to collectively learn to see companies as more than one-trick ponies designed to generate financial profits, and instead as vehicles to enhance and support the greater good. 

This, inevitably, will involve some frank and open conversations. 

Before you can address a complex problem, you need to talk about it first. Just look at #MeToo, the reckoning on race after the murder of George Floyd, pronoun usage or body neutrality. Widespread conversations – at home and at work – are critical to exposing harmful societal behaviours. Discourse is the fuse that ignites paradigm shifts.

And yet, right now, this is a conversation most businesses aren’t having. At least not in a productive way.

While it’s true that sustainability reports and goals are now common practice for the world’s largest companies – with more than 2,000 businesses adopting science-based carbon targets and two-thirds of the world’s emissions covered by net-zero pledges – the communication around these new initiatives has been, in too many cases, vague, misleading and incomplete. 

Whether it’s because of a fear of legal ramifications (like the 2021 Dutch court ruling that ordered Shell to slash its greenhouse gas emissions by 45% by 2030), public backlash or the fact that their efforts aren’t yet advanced enough to share, many companies are loath to talk about their sustainability initiatives. 

Before you can address a complex problem, you need to talk about it first.

Those that do are telling only part of the story: 40% of websites feature misleading environmental statements, while 50% lack sufficient information to allow readers to judge the accuracy of their green claims, according to two recent surveys by a British competition regulator and Sustainable Brand Index.

The silence and half-truths – commonly referred to as green blushing and greenwashing – are slowing climate progress. Consider that 30% of Nordic consumers say they simply don’t believe business sustainability claims – while 53% of consumers in the United States say the same. And only about one-third of investors, on average, believe that the quality of ESG (environmental, social and governance issues) reporting these days is adequate, according to a Canadian survey conducted by PricewaterhouseCoopers. 

This means human beings that want to do something positive for the planet with their money are finding it difficult to do so, because it’s nearly impossible to differentiate between the companies that are genuinely supporting real climate action and those that are pretending to be.

These statistics speak nothing of the impact poor sustainability communication has on business progress. Sustainability works only if everyone is along for the ride. We need a free exchange of information and ideas – and the communications infrastructure to connect complex systems and industries. We need to eradicate siloed thinking and start sharing sustainability best practices. 

And for that to happen, we need to start talking louder and more transparently about sustainability – and recognize that our individual actions have value only if viewed in the context of the greater whole.

Tell the full story

To “win” at the sustainability game – to leverage it to engage and attract employees, earn customer loyalty and trust, and convince green investors you’re the real deal – you need to demonstrate that your motives are genuine. And that you have your eye on the bigger prize: a habitable planet. That requires a different type of communications strategy.

For one thing, telling only the positive side of the story doesn’t work in this space. Consider Keurig Canada, which was recently slapped with a $3-million fine for false and misleading claims around the recyclability of its K-Cup pods. In this instance, the Competition Bureau determined that, while the pods were technically recyclable, they were widely recyclable only in Quebec – meaning the rest of their Canadian customers, who thought they were recycling their pods, were actually inadvertently tossing them in the trash.

Similarly, fashion brand H&M received serious public backlash and a slap on the wrist by Norway’s consumer watchdog in 2019 when its Conscious Collection of “sustainable” fashion was called into question. The watchdog said that the clothing company provided insufficient information about its “sustainable style” collection and that there was no way to know if a garment was made of 100% sustainable materials, or 5%. The company has rebranded the collection to Conscious Choice, and its website states that “at least 50% of each piece is made from more sustainable materials, like organic cotton or recycled polyester. The only exception is recycled cotton, which, for quality reasons, can only make up 20% of a product.”

In both of these scenarios, a little transparency could have gone a long way and curbed some of the resulting reputational damage. As of yet, no business is 100% sustainable, so instead of trying to convince stakeholders otherwise, companies have to find a way to emphasize progress over perfection, acknowledge missed benchmarks when they inevitably occur, and explain their plan for course-correction.

Lastly, companies that genuinely prioritize sustainability have a lot to win by sharing their progress with others – and creating more educated stakeholders. So rather than hiding behind the numbers in a chart or making vague claims, one way to win stakeholder trust is to tell ESG stories in a way that honestly outlines and dismantles an organization’s path to net-zero.

The silence and half-truths – commonly referred to as green blushing and greenwashing – are slowing climate progress.

Understandably, this can be challenging, particularly at this early stage, without a robust regulatory framework to guide the way. But, according to EcoVadis, many companies are finding success (and avoiding litigation) by setting a solid foundation in place, acquiring senior-management-level support, introducing meaningful policies and metrics, facing adverse impacts head-on, and substantiating all positive sustainability claims. 

The firm also recommends integrating ESG reporting processes into a “coherent, company-wide system of sustainability governance” and finding ways to extract insight and skills from all members of an organization to ensure reports offer real value to stakeholders.

Ultimately, to succeed at this exercise, organizations will have to zoom out, reconnect with that bigger mandate of reducing the world’s carbon emissions, and begin to view themselves as champions of a cause. This will be substantially easier if they’ve already clearly connected their purpose to their broader values and vision – and started to view sustainability communications as a form of advocacy, education and community-building.

This shift will make it possible to squeeze sustainability-speak into regularly scheduled content marketing – or bring corporate social responsibility and ESG stories to the foreground of company websites. This, in turn, will help differentiate the green businesses from the greenwashers, allow them to earn a reputation for sustainability leadership and, most importantly, bring people and businesses together to facilitate faster climate action.

Communication, on its own, can’t save the world. But saving the world without better communication will be downright impossible.

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