If the events of the past year have taught the global business community anything, it’s that sustainability is no longer optional. Companies that have already integrated sustainability into their long-term strategies are much better able to weather the ceaseless storms of the global pandemic, climate crisis and other disruptions.
Even when the COVID crisis eventually comes to a close, the need to build resilience through a solid sustainability strategy will only continue to grow. Last year was the second-hottest year on record, and the climate crisis continues to threaten global businesses. The fight for racial equality is far from over — businesses will need to rethink how they address the social side of sustainability. The only certainty is uncertainty, and sustainability is key to facing the future with resilience.
Communicating sustainability is about more than seeking credit where credit is due — it is a key driver of business value. For business communicators, this means cutting the fluff and focusing on sustainability stories that are transparent, authentic, human, connected and validated.
The Business Case for Sustainability
Companies that successfully integrate sustainability across their core business operations — and communicate this effectively — stand to reap financial rewards. Some 40% of consumers seek purposeful brands and trust in brands to act in the best interest of society.
This is doubly true for young people — 73% of millennials are willing to spend more on a product if it comes from a sustainable or socially conscious brand, and 81% expect the brands that they buy to be transparent in their marketing and actively talk about their sustainability impact.
Meanwhile, sustainability continues to attract the investment community. Global sustainable investment now tops $30 trillion — up 68% since 2014 and tenfold since 2004. In the face of major global challenges, the world is undergoing a transition to a more sustainable, net-zero carbon economy.
As BlackRock Chairman and CEO Larry Fink wrote in his annual letter to CEOs:
“...companies with a well-articulated long-term strategy, and a clear plan to address the transition to net zero, will distinguish themselves with their stakeholders — with customers, policymakers, employees and shareholders — by inspiring confidence that they can navigate this global transformation.”
However, Fink warns that companies that fail to embrace sustainability will see their businesses and valuations suffer, as “stakeholders lose confidence that those companies can adapt their business models to the dramatic changes that are coming.”
And let’s not forget about employees — arguably a business’s most valuable asset. A majority of millennials (86%) would take a pay cut to work for an organization that aligns with their values, and are more than five times more likely to stay when they have a strong connection to their employer’s purpose.
Creating Effective Sustainability Communications
Before you can communicate sustainability effectively, you need to make sure that you have a solid strategy. Sustainability strategy must be rooted in the core of your business, explain why it's “good for business,” connect to business strategy and connect to organizational purpose. Ideally, the business and sustainability strategy are one and the same.
Creating effective sustainability communications starts with uncovering your goals, audiences and what those audiences are looking for. Having a clear understanding of why your company communicates sustainability is critical for success. There are generally two main reasons for communicating sustainability information to stakeholders: to demonstrate performance, and to build reputation.
Demonstrating Performance and Building Reputation
Your company’s performance matters to a range of stakeholders, but most importantly to investors, environmental, social and governance (ESG) rating agencies, non-governmental organizations (NGOs) and government regulators. These stakeholders are looking for a specific type of content. That includes data and analytics, management of risk, leadership alignment and governance, policies and codes of conduct, and external assurance and recognition.
They are the target audience of sustainability reporting efforts. While they may be influenced by reputation-building content, hard data and policies drive their decisions more than stories that pull on the heartstrings. Your report and other communications to this audience should be straightforward and data-driven, featuring indices and clear links for finding specific content.
Companies invest heavily to drive continuous sustainability progress and performance and can maximize their return on investment by effectively telling that story to stakeholders. By transforming the data and information in the report into emotive, engaging content, companies can improve their reputation in the eyes of customers, employees, communities and the public.
As opposed to the more technical investor audience, these stakeholders are looking for high-level takeaways, stats, soundbites and human-interest stories that they can easily consume through infographics, video, social media posts, and summary pieces.
To illustrate, thinkPARALLAX for several years has worked with our client International Paper to develop sustainability communications that amplify the impact of their strategy. We helped them create a strategic framework called the IP Way Forward, which clearly defines and visually portrays how sustainability is integrated into the business. This serves as both a roadmap for how the company aims to achieve its sustainability goals, as well as a high-level guide for audiences to easily understand and appreciate its strategy and impact.
In addition to demonstrating performance through sustainability reporting, we also work with International Paper to build reputation through activations like creating their Our Renewable Future microsite — which tells the story of their supply chain.
Sustainability: A Long Play
To be successful in sustainability, companies must take the long view with a strong growth mindset. There’s no such thing as a sustainable brand — only more or less sustainable. Success doesn’t come quickly, and you will face plenty of hurdles along the way.
But the rewards are worth it. Many upstart brands with sustainability at their heart grew 186 times the average rate for their product categories. And incumbent brands that have used sustainability to reignite their relevance have seen 5- to 6-times-higher growth rates.
From alternative meats to clean energy, sustainability has moved to the top of every stakeholder’s mind, accelerated by the pandemic. But sustainability isn’t just about current crises. It also covers human rights, diversity, equity and inclusion, climate action, supply chain transparency, investing, clean energy, regenerative agriculture and the circular economy.
Once your sustainability strategy is in place, you can amplify that impact. Telling this story to investors and the public will drive business value. When done right, sustainability can boost your long-term brand power, unlock new customer segments and open up new investment opportunities — all while building resilience so your company is better able to bounce back from inevitable future disruptions.
Jonathan Hanwit is a founding partner and chief executive officer of thinkPARALLAX, an ESG strategy and communications agency. As a branding, strategy and sustainability expert, Hanwit has worked with international brands such as Southwest Airlines, Qualcomm, Twitter and International Paper on large scale internal and external sustainability focused communications projects. Both professionally and personally, Hanwit donates his time and resources to causes and communities for positive impact. He serves on the board for the School of Peace and Justice at the University of San Diego and spearheads fundraising for the local public school district. The father of two boys, he spends as much time surfing and traveling the world as possible.