The number of corporate net zero goals announcements has tripled from 500 at the end of 2019 to 1,565 in October 2020. Most S&P 500 companies have begun to address ESG in earnings calls. This is good news if we are to reach the goal of limiting global warming to 1.5 degrees Celsius.
However, the lack of white space has created a media funnel, wherewith the exception of larger household name brands like General Motors and Amazon, most corporate impact and net zero announcements go unnoticed.
In fact, a growing number of observers have become skeptical of yet another corporate net zero or impact-focused commitment, often labeling them as “greenwashing.” While there is some truth to these fears—and companies must first develop strategic, measurable, and impactful roadmaps to reaching their commitments well before announcing them—there are a few important elements to consider before sharing corporate commitments.
Disclose the full life cycle of your business—and be honest about areas of improvement at any stage.
One key theme coming from major players in the space, such as the UN Global Compact, is the application throughout the life cycle to create a circular economy, including the supply chain. From manufacturing and production, to packaging, freight, point of sales and disposal, companies must think through the full life cycle of their product or service and address each specifically.
This should be done in the planning stage before a commitment is announced. An honest approach, which addresses potential pitfalls at each stage of the life cycle and sets specific goals, protects a company from critiques.
In contrast, leading a program and its communication with carbon offsets raises a huge red flag signaling greenwashing to media and other key stakeholders. While carbon offsets can be used as a complement to commitments, they are not a substitute for a long-term solution or pathway to a sustaining net zero.
Leverage third party endorsers to prove your work.
There has been a huge push for metrics and reporting over the past year. Out of approximately 160 providers of ESG metrics—there are still no universal, standardized metrics that make way for equitable benchmarking across sectors, industries and so forth—there are a few that have risen to the top.
While mandated financial disclosures of ESG have a bit more nuance to them, the EU’s Sustainable Finance Action Plan and the United States SEC are working through disclosure requirements separately—verifying corporate net zero plans or impact scores by leveraging a third-party authority is a necessary element in any corporate impact commitments and their communications.
Some of the more common, revered metrics frameworks to consider working alongside include:
- Task Force on Climate-related Financial Disclosures (TCFD): consisting of 31 members from across the G20 and chaired by Michael R. Bloomberg, this framework helps public companies and other organizations disclose climate-related risks and opportunities through existing reporting processes.
- MSCI ESG Metrics: leveraged by top financial analysts including Jefferies, Barclays, Morgan Stanley and others, MSCI ESG offers its own ratings that measure corporate resilience to long-term ESG risks and identifies industry leaders’ ability to manage those risks.
- Science Based Targets Initiative (SBTi): a joint initiative of CDP, the UN Global Compact (UNGC), the World Resources Institute (WRI) and WWF, whose aim is to enable leading companies in setting ambitious and meaningful corporate GHG reduction targets, backed by science.
- Sustainalytics: a leading independent global provider—powered by Morningstar, Inc—of ESG and corporate governance research and ratings to investors.
Do your research and build media relationships before you plan to announce.
There are many reporters covering a variety of topics surrounding climate change, the path to net zero, ESG investments and social impact; you name it. Not all reporters cover corporate commitments, in fact, more are focused on the science. Before reaching out to a reporter, look through the past six months of coverage, noting any changes of coverage recently.
If you’ve done your homework, dissected your business life cycle, addressed each stage of the supply chain within your impact goals and identified and applied metrics, you will likely have more than one story to tell.
Media mapping is important to build a reputation with key reporters and other key opinion leaders within your created white space. If you are a lesser known company or brand, you will need to put in the leg work to develop relationships through speaking engagements, owned blog posts and media backgrounders or desk sides—positioning your company and its leaders in the ESG space to give them credibility and validity.
Position yourself within the big picture.
Whether you are a B2B or a CPG company, everything trickles down to an end consumer. Keep them in mind because they are who you and your stakeholders are ultimately talking to.
To truly cut through the clutter of corporate impact announcements, you will need to communicate why your commitment matters in the simplest of terms, clearly discussing impact from supply chain to metrics and financial implications for the business. You need to specifically address: what your business’ function in society is, and how does decreasing its carbon footprint benefit all?
When it comes to putting your commitments into writing, keep in mind the following elements to be able to tell their impact:
- Do your emissions targets require an exceptionally large investment or return?
- Do you have larger household name brands/retailers/suppliers that will be affected throughout the supply chain due to your commitments?
- What does this mean for the greater industry? For example, is your industry a major contributor to carbon emissions? Be an industry leader, even if you are a smaller company, you can play a larger role—lead the industry by example and do not be afraid to put out a call to action for the rest of the industry to join and partner for a larger commitment.
Storytelling is critical. Tell an emotive and inspiring story and simplify—leverage graphics, video content and other powerful storytelling techniques. Often, it is easier to build a groundswell of consumer support on social and digital first. The more your end consumer cares, the more the news cycle will start to pay attention. Sometimes traditional media is the last to follow. It’s a bit of reverse engineering but just look at the legislative pressure that plant-based meat companies have put on the dairy industry by rallying their consumer’s cries for more fair labeling laws.
At the end of the day, journalists write about what their readers want to read about. Our job as corporate communicators is to make readers care.