How To Navigate Political Pushback of ESG initiatives
04 May 2023 13:00
According to our research, 88% of publicly traded companies had Environmental Social Governance (ESG) programs in 2022. Initiatives related to sustainability are becoming undeniably important—but what happens when key stakeholders aren’t on board?
Some executives are wary of implementing ESG programs or setting lofty goals, for reasons such as fearing negative backlash or being seen as “political”. The fear that certain marketing around ESGs will make a brand look like they’re taking a bigger stance on climate change, or that they’re only doing the action to appease the public, is a real downside.
Here, we present ways in which to appease all stakeholders, and the public alike, when it comes to creating ESG strategies.
Underscore the benefits of ESG initiatives
It’s important to ensure that stakeholders understand the potential benefits of an ESG strategy when they’re concerned about potential pushback. One such benefit is attracting new consumers and maintaining old customers. An OpenText survey found that 88% of buyers say they will prioritize sustainable products. Presenting data on how important environmental activism is to the general population—and how that can sway things like shopping choices and investment portfolios—is a key first step in convincing higher-ups of the importance of an ESG initiative.
Beyond those business growth benefits, there’s also the basic fact that companies will begin to be penalized for not adhering to environmental policies. For example, the SEC announced that they will force businesses to disclose environmentally hazardous materials and practices, so not working toward sustainability can lead to a far greater pitfall than the upfront resources for these goals.
Though executives may fear that consumers will assume ESG goals are only meant to cater to a particular audience, underscoring that those opinions are often outweighed by the vast majority who view ESG initiatives in a positive light is key to moving forward.
Find ESG initiatives that appeal to everyone
Some executives may fear that an action will make the company look like it’s taking a political stance. In our E-Book, “The Ins & Outs of ESGs”, we recommend finding strategies that will appeal to everyone, regardless of beliefs. A business can begin with direct actions like beach cleaning or regular volunteer days that are less likely to be perceived as politically polarizing. With the insight of how those smaller actions benefited the company, larger actions can become more tangible.
Similarly, some ESG initiatives can actually save time and energy for businesses in the long-term. Consider a fix like removing a layer of plastic wrapping from product packaging or changing other packaging materials. Businesses can conduct simple user surveys to see if the user experience would be greatly impacted by changing the packaging and present that data to executives for buy-in. In many cases, users may not even notice the plastic change, while some might consider it a universally helpful difference.
Listen to consumer feedback on ESGs
When executives are pushing back on potential action, it’s important to listen to your audience. One of the best ways to do this is through social listening tools, which scan social media posts for certain keywords and offer reports on how the public is discussing brands. These social media reports can help companies identify the sentiment around potential initiatives, gathering crucial data about what the public really wants.
Social listening tools will also help highlight areas of ESG action that might be perceived as too political, thereby avoiding public pushback. Perhaps phrases like “carbon neutral” and “climate-friendly” are seen as more polarizing, while things like “low-waste” and “BPA free” are more universally approved.
Similarly, it’s important to identify major pain points that consumers are pointing out about a company. Maybe a brand has negative social sentiment because of its wasteful packaging—consumers might be saying they don’t like how much space is left empty in a container of protein powder. That could identify areas for growth and change that factor into both ESG goals and overall business goals.
Research ESG initiatives that work for competitors
Just like consumer data can help executives justify taking big steps for ESG strategies, competitive data can also be a major motivator. Staying ahead of the curve in one’s industry is always the goal, so knowing what’s working for competitors—be it carbon-neutral promises or new sustainable sourcing that attract new business—is a great way to craft initiatives.
Competitive analysis can also help identify areas to avoid, by seeing what went wrong for other companies. For instance, if a brand received a great deal of negative pushback from people assuming they were taking a political stance by going carbon-neutral, their competitors can know not to use that phrase.
Use media monitoring to inform your ESG strategy
ESG initiatives are key ways to attract consumers and make current customers happy. They are lucrative for public companies in terms of stock investment potentials, and they often are a reason why consumers choose one company over another. But these benefits are sometimes reduced by the public viewing ESGs as simply a political move.
Finding data to support ESG suggestions, and consumer feedback that highlights the importance of sustainability measures, is a great way to convince higher-ups that the positives outweigh the risks. Looking into impactful changes that could improve a company’s carbon footprint can also provide helpful motivation.
In order to stay on top of ESG news and competitive achievements, check out Nexis Newsdesk’s ESG Tracker, which allows for current alerts and regular reporting of your ESG sentiment. You can also read more about ESG trends in our 2023 E-Book.
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