As socially conscious and eco-friendly investors continue to press for change, there’s a big opportunity for brands that can land their message.

Businesses are responding to the rise of ESG—environmental, social and governance concerns—because of the investment that has followed those three letters.

“According to a June 27 Wall Street Journal article on socially responsible investing, ESG investing describes roughly one-third of all assets under professional management in the U.S.,” noted Mark Weiner, chief insights officer for Cognito, in a recent article for PR Daily. “ESG is more than just a PR platform; ESG contributes to a company’s reputation, and PR is widely associated with reputation management.”

And the ability to deliver on ESG promises will be the foundation of corporate trust heading into 2022 and beyond.

Look no further than the launch of PwC’s New Equation initiative, which hopes to help business leaders measure their ESG performance and build trust with the growing number of stakeholders to which businesses must answer.

“When we look at the macro forces that you’re all seeing across the globe within the United States, and then you see how it’s been accelerated in the last 18 months based on COVID, we see a world in which stakeholders are proliferating,” says J.C. LaPierre, chief strategy and communications officer at PwC.

“It’s no longer just your investors and your clients.”

And with the increase in stakeholders comes competing priorities.

Everything works together

As ESG matures as a concept and practice, companies now have to do more than slap an eco-friendly label on their products to stand out.

Rick Lyke, executive vice president and account executive with integrated agency Mower, explains it this way: If you are a solar panel maker, for example, it’s no longer enough to tout your product as reducing carbon emissions. Now, you must also show how your business is helping your local community. Are you helping local farmers save on their electric bills? Are you bringing jobs to the community?

“This is an evolution and, and it’s something that is to be expected,” Lyke says. For some of the first businesses to jump on the ESG trend, just being able to say you were environmentally friendly was enough. Now, “E” has to work in concert with “S” and “G.”

“People now are kind of expecting that, you know, their products are going to be better for the environment,” Lyke says. “What other things are you doing? What other boxes are you checking?”

A moment for trust

Just as the need for your organization to explain its record on ESG comes the rise of mistrust for institutions of all kinds. And it’s the lack of trust that PwC hopes to combat.

It’s a mission that sparked PwC’s launch of the Trust Leadership Institute, which aims to equip more than 10,000 business leaders with the tools to build trust with audiences.

“What we believe is going to be the two most important things that our clients and companies deliver going forward is building trust with all of their stakeholders and then driving sustained outcomes,” says LaPierre.

And ESG is a big part of building trust, particularly with employees and investors. “One of the things that’s most important to workers is to work for companies that are responsible,” says LaPierre. “In order to get access to capital flows, you have to be able to demonstrate that you are doing right things.”

And it’s crucial that companies be able to back up their claims with data, measurement and careful contextual explanation.

“Whereas you used to be able to just say, ‘Here’s what I’m going to do now,’ the expectation is you can back it up with some form of transparency,” LaPierre says.

Ensuring success

So, what builds trust? In a recent survey, PwC was able to identify four things that business leaders can do to build trust:

  • Cybersecurity and data privacy. “The way in which you treat those [topics] builds trust in very big ways,” LaPierre says.
  • Ethical decision-making. How does your organization make decisions? Do choices reflect a process that takes in multiple perspectives and stakeholder needs?
  • Employee practices. How are employees treated?
  • Admitting mistakes. As Lapierre puts it: “When things don’t go according to plan, you take accountability for it.”

And business leaders believe communications will be essential in establishing trust in the future.

“One of the other really interesting survey points was that 72% of the business executives that we surveyed believe that effective communications will be critical to building trust with any of their stakeholders,” says LaPierre. That’s great news for communicators—but requires that would-be counselors brush up on the business implications for ESG and trust.

Low trust as an opportunity

For PR pros, the lack of trust in institutions—alarming as it might be—presents an exceptional opportunity.

“There’s a great deal of skepticism out there, and that’s where this opportunity exists,” says Lyke. “For brands the level of trust is declining at the same time that consumers are looking for brands and for companies that they can put some trust in.”

To start building some trust capital right away, Lyke recommends getting your brand story and values in front of your employees.

“Getting your story in front of your employees is probably the first big step that you can make employee pride in what you’re doing in these areas,” Lyke says. But before you launch a campaign to tout your brand purpose, you have to make sure your house is in order.

For that, Lyke recommends an audit to make sure your operations and current work are living up to your purported values. For brands that fail to meet their stated ambitions—such as Belcampo Meats—the fall from grace can be catastrophic.

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