ESG, Sustainability, CSR, and other buzzwords - What should you communicate exactly?
To have your message received, believed, and retained, to see that trust level going up, and stakeholder relationships strengthened, you must master the topic you talk about.
In 2020 communicators from all industries had to suddenly familiarize themselves with an array of medical and epidemiological terms to keep educating and informing their public through the Covid-19 crisis. As the vaccination campaigns bring renewed hope for an end to this global emergency in 2021, the impending climate change and an increased focus on sustainable development promise to keep sustainability on top of the international agenda for the years to come.
Organizations small and large are either jumpstarting or speeding up their sustainability efforts to catch up with competitors, meet their stakeholders’ expectations, or simply fulfill their purpose. Consequently, communicators are tasked to effectively put on center stage a sustainability narrative both within and outside their organizations, with a fine understanding of matters spanning from diversity, inclusion, and social justice, to climate change and environmental protection.
With such a large scope and so much ongoing progress in the sustainability field, buzzwords grow by the day. “CSR”, “ESG”, “responsible”, “sustainable”, “green”, “environmentally friendly”, “Net Zero”, “Carbon Negative”, “Climate Positive”, are just some of the words that keep popping up in news articles, ads, websites, product descriptions as well as job titles. But which terms should you use?
Well, the answer to this question depends very much on where you and your organization are in the sustainability journey. So, let’s start from the beginning.
Corporate Responsibility and Corporate Social Responsibility (CSR) are the starting point for organizations taking some degree of responsibility toward the society or the environment in which they operate. Although responsible companies have been running since the 19th century, the term CSR only began circulating in the US business environment in the 1970s.
Responsible organizations recognize that their activities have an impact on the economy, the environment, and the society, and are accountable for it. Consequently, they roll out projects or conduct business in ways aimed at mitigating their negative impact or even bringing positive change to their communities and the environment.
Over time, a strong correlation between business success and sustainability emerged. More and more companies started adopting the Triple Bottom Line (TBL) framework, evaluating their business performance taking into consideration the three Ps, which include People and Planet beyond the sole Profit. Pressured by consumers, NGOs and regulators, organizations embraced a more holistic and integrated approach to sustainability.
Today, the most advanced ones report their performance based on ESG – Environment, Social, and Governance – criteria. These companies embed ESG objectives as the foundational elements to create value and measure their sustainability efforts through quantifiable metrics. ESG scores and ratings are also being developed, attracting a growing number of impact investors.
The one from CSR to ESG is therefore a journey from accountability to measurement. The very same concept clearly applies to the other terms you encounter when talking about sustainability. Therefore, we can trace a trajectory from generic expressions like “green” or “environmentally friendly”, which indicate a product, a project or a company that cares for the ecosystem, to terms like “carbon negative”, “Net Zero” or “climate positive”, which reflect the impact based on solid, measurable data.
While there’s no right or wrong terminology, there is however a shifting public perception about these terms, and even more importantly, a growing expectation for companies to embed ESG criteria, measure their impact, and transparently report the data. Today, terms like “CSR”, “responsible”, “Green” or “environmentally friendly”, are in fact increasingly associated with mere marketing tactics that lack a measurement framework.
The pandemic hasn’t stopped a growing number of consumers from demanding companies to be responsible and take a stand on both social and environmental issues. At a macro-level, Europe is pushing ahead its Green Deal, President Elect Joe Biden declared the United States will rejoin the Paris Climate agreement, and China is committing to become carbon neutral by 2060. These happenings all indicate a growing need for measurable, comparable data from organizations large and small in the coming years.
Technology is finally allowing for sustainability to be measured. Generic assertions about a company’s positive impact that are not backed by solid data won’t do anymore. Given the unprecedented scrutiny businesses face, the sooner you move on this trajectory toward measurable sustainability practices that can be communicated transparently, the better for your reputation and for your bottom line.