Sustainability has really come of age. No longer seen as something ‘nice’ for businesses to do, better environmental, social and governance practices are increasingly demanded by investors and analysts, and becoming embedded into wider business strategies. And with good reason. Not addressing ESG issues is now a risk for businesses.
Investments in ESG-funds in 2020 more than doubled from the year before. Businesses that don’t prioritise ESG and demonstrate real progress against key issues will miss out on investors looking to invest in more sustainable companies. Not only that, businesses also need to communicate their ESG efforts effectively with shareholders and analysts to make sure they get credit for the actions they’ve taken. And this is where we find businesses either succeed or fail, often spectacularly so.
Sustainability: a grey area
It’s estimated that 40% of eco-friendly claims online could be misleading customers. This is concerning. People are likely to become sceptical of all claims if they can’t tell the good from the bad.
The fashion industry is a great example of how misleading businesses can be. In the Fashion Transparency Index 2021, you might be surprised to see which brands scored well for transparency and which ones scored worryingly low. The leaders included fast fashion brand H&M, alongside Timberland, The North Face and Vans, while John Lewis and Fjallraven ranked very poorly.
Interestingly, Fjallraven is a brand you might associate with being more aligned with nature, according to its own claims:
“As an outdoor company, we’re acutely aware of this impact and we do our utmost to keep our environmental footprint as small as possible.”
We’re not so sure.
Is doing something better than doing nothing?
Probably not. Unilever learned this recently when it tried to attach a purpose to mayonnaise. When you open a jar of Hellmann’s, you probably don’t see yourself as taking an active stance against food waste. Neither did its shareholders.
This move caused Unilever’s shares to fall by a tenth – to the level they were at five years ago. Ouch.
The problem with a far-fetched purpose is that it’s out of touch with the fundamentals of the business and with shareholder’s priorities. People may find it difficult to decipher which ESG efforts are making a real impact, but they can sniff a made-up marketing message from a mile off.
The greenwashing red card
The greenwashing trap is something that a lot of businesses fall into. Take Coca-Cola. It got a slap on the wrist in the shape of a lawsuit for claiming to be sustainable on its packaging while being responsible for producing 100 billion single-use plastic bottles every year.
In response to greenwashing claims, the Competition and Markets Authority (CMA) launched investigations to clamp down on misleading ESG statements. It has since proposed six principles that it believes businesses should follow when making such claims, which are expected to be officially published later this year.
One of these principles is that claims must be substantiated. Businesses shouldn’t make claims they can’t back up – yet many currently do. Those that do will come under growing scrutiny, which is why clear measurements of impacts are becoming increasingly important to ensure sustainability communications land well.
Do what you say
Now for the good ones. We see the sustainability winners as the businesses that deliver authentic messages, backed up by evidence and facts.
In fashion, we have the likes of Patagonia and Finisterre, which are battling the industry’s poor sustainability rep. British brand Finisterre makes lots of interesting comms decisions. Its water-soluble packaging says ‘Leave no trace’, which makes perfect sense because you can pour water over it and watch it disintegrate before your very eyes. Another of its schemes, ‘Lived and Loved’, is more than nice wordplay – it’s a service for repairing people’s clothes so they don’t throw them away.
In food, a clear winner is the app Too Good to Go. Its purpose is to fight food waste. But not by producing jar after jar of mayonnaise – by connecting consumers with food that will be thrown away if it isn’t bought that day. Too Good to Go’s sustainability comms are heavy with numbers. Like this:
“Saving one Magic Bag [surplus stock] from being wasted saves 2.5kg of CO2e – the same as would be produced by charging 320 smartphones.”
It’s a great example of how numbers don’t need to be alienating. Part of good sustainability comms is putting the numbers into relatable contexts so that people can make sense of the impact your business is making.
ESG marketing that makes sense
It seems simple enough to avoid obvious sustainability marketing traps, like failing to provide evidence and being dishonest about impacts. What is more challenging is making sure that messages are also on brand, aligned with your business’s strategy and telling the full story. Our sustainability strategists and writers can help. We’ve built ESG narratives that form the foundations of long-term sustainability comms for global businesses, so get in touch for our support.