Consumers want their products to be ethical and eco-friendly. Advertising standards are holding brands to account for their green claims. The pressure is turning on brands to prove that when it comes to their Environmental, Social and Governance (ESG) efforts, they’re walking the walk.
Whether it’s a social media storm kicked up by influencers, a media scandal or even shareholder backlash, the consequences of getting ESG wrong can break a brand if they’re not careful, and many have found themselves under scrutiny and even facing legal action for their failings.
And that’s because, when it comes to ESG, there’s another letter in the acronym that too many companies neglect. ESG+R incorporates ‘Resilience’ – ensuring that companies are mitigating the risks associated with climate change and operating in an increasingly uncertain world.
Many investors and ESG experts began calling for this additional metric to be added in the wake of the pandemic, to ensure that companies are also considering their ability to effectively recover, adapt and grow in the face of unpredictable challenges.
But even companies that are investing in their resilience planning efforts often forget to assess and mitigate their communication risks. Often a crisis blows up not because of the operational mistakes at the heart of the issue, but because of how the communications are handled before, during and after the crisis event.
ESG has evolved from Corporate Social Responsibility (CSR) – an area often left to the marketing team or a small, dedicated department within the company, and is often seen as a “nice to have” – done largely for publicity purposes. But ESG+R can no longer exist in silos, and brands shouldn’t be communicating their efforts without ensuring that they are fully embedded across the business and that the communications strategy has been thoroughly risk assessed.
Your consumers and shareholders aren’t afraid to ask the tough questions, and part of your risk assessment and resilience planning should be making sure that your brand has the answers, and the evidence, to back them up.
If you’re claiming to be sustainable (or that your product is sustainable)
Everything we do has an impact on the planet. Our aim as businesses is to minimise our negative impact, and maximise our positive impact as much as possible. But “sustainable” is a very broad term, which will mean different things to different people, so you should approach this very cautiously.
Often brands will claim to be “sustainable” when in reality, they are less bad for the planet than the alternatives on the market, but still have a way to go. Or they will be focusing on one area, like their carbon footprint, but not considering their water footprint, methane emissions, plastic usage, impact on biodiversity, or other environmental factors.
The Green Claims Code recommends steering clear of words like “sustainable” and “eco” for this reason – they are hard to define, may be suggesting to a potential customer that the product or business is better than it is, and could be misleading.
Budget airline Ryanair fell foul of this in 2020 and had one of their ad campaigns banned for claiming to have the lowest emissions of any major airline in Europe. Their figures were based on carbon emissions per passenger per kilometre flown – because it has the youngest fleet, highest proportion of seats filled on flights, and most efficient engines. But they were crticised for using data from 2011, which the Advertising Standards Authority said held little value as substantiation for comparison in 2019, and because the adverts failed to factor in seating density, which it considered significant information required to understand the basis of the claim.
Rival airline easyJet faced similar criticisms for claiming that their flights were greener than a hybrid car – claims which were made on an ‘emissions per person’ basis, under the assumption that the plane was full and the hybrid car was only carrying one passenger.
If you’re communicating your brand’s efforts around sustainability, here are some fundamental questions you should be able to answer:
- What do you mean by sustainability?
- Does your business have a sustainability policy?
- Are your eco claims compliant with The Green Claims Code?
- How are you measuring progress?
If you’re working towards net zero
If you ask most companies about their climate action, you’re likely to hear about their commitment to ‘net zero’ targets.
Net zero means achieving a balance between the amount of carbon (or total greenhouse gasses) emitted, and the amount removed from the atmosphere. When the amount produced is no more than the amount taken away, net zero is reached. Global net zero commitments doubled in 2020 and commitments from corporations more than tripled.
However, there is currently no single way to define and measure net zero, so not all pledges are the same. Some companies aim to fully decarbonise their own operations and supply chain, others are focusing on offset rather than reduction.
Most net zero plans have a target of achieving this by 2050, the date which aligns with the Paris Climate Agreement, but many experts argue that this is too far off to create enough accountability, and that companies and governments should be aiming for 2025 or 2030 instead, to make their action meaningful.
If your company has a net zero strategy or pledge, you should be prepared to answer these questions:
- What is your deadline for achieving net zero and are you on track?
- Do you have science-based targets aligned with the Paris Climate Agreement across your entire value chain (not just direct activities)?
- Which greenhouse gasses are covered by your targets? Is it just carbon or does it include others, like methane, which is more potent?
- How are you planning to achieve net zero? What percentage of your strategy relies on offset, and which Greenhouse Gas Reduction measures do you have in place?
- What Negative Emissions Technologies (NETs) are you using to remove carbon from the atmosphere? And what contingency plans do you have in place if they don’t succeed?
- How has your net zero target been embedded into your company’s governing documents and policies? (It needs to be more than just a promise and a press release!)
- What risk management have you done to ensure that you can stay on track with your net zero ambitions through the decades of disruptive changes ahead?
- How often will you measure your progress, and how will you report on this to stakeholders and the public? Who will keep you accountable, and what will happen if you’re not on track?
- What about your historical emissions?
If you’re planting trees
Planting trees is a popular way for brands to offset their carbon footprint and give back. It’s a simpler, more visual message than a lot of the other complexities involved in sustainability, and it’s popular with customers, which is why so many brands embed it in their marketing.
But if you don’t do your due diligence, your tree planting partner schemes might not be as green as you think, and could actually be doing more harm than good.
If you’re planting trees, you should prepared to answer these questions:
- What’s your forest footprint? Are you contributing to unsustainable deforestation by not choosing FSC Approved suppliers for your packaging, furniture, paper and wood products?
- Does your tree planting programme protect biodiversity?
- What forest management measures will be in place to protect the trees you plant?
- Are forest communities being supported by the scheme you use?
- Have you taken all possible steps to reduce your carbon footprint before you offset?
- If you are planting trees to offset, how long before they reach maturity and become effective carbon stores? Have you factored this into your calculations?
If you’re speaking out about social causes
In 2020, several big brands rushed to express solidarity with the Black Lives Matter movement after the death of George Floyd, and quickly found themselves being accused of hypocrisy when former employees started speaking out about enduring racial abuse while working for them.
Coffee giant Starbucks faced similar claims when they released an advert following a young trans man changing his name, which came with a pledge to raise at least £100,000 for trans youth charity Mermaids through the sale of their mermaid cookies. Although the campaign was initially widely welcomed by the LGBT+ community and allies, past and present employees began speaking out against the brand, revealing that they had faced discrimination, been misgendered and deadnamed at work and faced strugles to get surgeries covered on the company’s health insurance plan.
Brand activism is good for business, with more and more customers expecting the brands they buy from to take a stand for the causes they care about. But it comes with risk, and can easily backfire if it’s being treated as a PR exercise and not embedded in company culture.
If you’re taking a stand, be prepared to discuss:
- What are you doing in your business strategies and operations to complement your stance?
- Does your history align with your intentions now? And if not, what are you doing to make things right?
- How does your activism make a tangible positive impact for this cause and the people most affected?
- How were the people most affected by the issue given a voice in your campaign? Were they consulted in its creation? And are they represented in a positive and empowering way?
- What does your company’s board look like? Is there diverse representation at every level in your business?
- Are you the right spokespeople to publicly talk about this, or could you have more impact by elevating the voices of others?
If you’re working with or giving back to charities
As soon as you donate to, or work with, a charity partner, you take on a level of accountability for their actions, and your customers and shareholders will expect you to do your due diligence to ensure that the money, time or resources you’re putting into the partnership are having the desired impact.
Scottish confectionery company Tunnocks found this out the hard way, when they found themselves at the centre of a media storm and calls to boycott the brand because they didn’t properly vet a donation beforehand.
If you’re making donations or working with charities, you should be prepared to answer these questions:
- Does the organisation have proper charitable/not-for-profit status?
- Are they transparent about their finances, operations and impact?
- Does their mission, values and operational behaviour align with your company values?
- What percentage of donated funds go to directly impacting the cause, and what is spent on administrative expenses?
- What are the top level salaries like and are they in line with the scale of the charity?
- Have you done your due diligence to ensure that your involvement will have the positive impact you intend?
Obviously these are just a small snapshot of the types of questions you should be able to provide answers and evidence for – the specific areas your brand should be preparing for will depend on your strategies and approach to ESG and your communications around it.
But what is clear for all brands, regardless of industry or approach, is that ESG+R is a must-have, and can’t be left just to one team. It has to be meaningfully embedded across your organisation before you can start communicating your efforts to shareholders and customers, otherwise you leave yourself exposed to risks that could do irreversible damage.
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