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The Importance of ESG marketing

At Lacewing Media, the conversation surrounding ESG has become increasingly more important over the last couple of years. Issues surrounding ESG (Environmental, Social and Governance), first came to light in the 2006 United Nations Principles for Responsible Investing. Last year, Bloomberg published that global ESG assets are set to exceed $53 trillion by 2025, meaning that they will represent over a third of the $140.5 trillion total assets projected to be under management. Due to growing interest in ESG, the acronym has become a subject of key focus within both the worlds of business and investment, and by consequence, marketing.

The presence of ESG in marketing: how it can help grow a brand

A McKinsey report projected that 60% of millennials globally wish to spend more money with brands that have a corporate social responsibility commitment. Marketing related to sustainability, social impact, diversity and community outreach are not new. However, marketing to meet these needs, whether it is through investment or B2C products, is critical. Whilst ESG is important to stakeholders and it is imperative that agreed KPIs are met on an internal level, it is also critical to be able to show that a company is a market leader when it comes to their ESG narrative, in order to promote brand awareness and protect a brand’s reputation. Brand awareness is attained through reputation and this is increasingly measured against how well a company performs in relation to ESG criteria.

Social media is a 24/7 animal. News headlines can reach us at any given moment. This means that companies are under continuous scrutiny from both clients and investors when it comes to their attitudes towards environmental and social impact. It is therefore important to centre your marketing strategy, whether it is B2B or B2C, around efforts that are aligned with ESG criteria. These efforts should be centralised on factors such as corporate citizenship, ethical management, wellbeing of employees, environmental responsibility and community outreach. Companies that have a strong ESG score have greater credibility when it comes to their brand, which in turn boosts loyalty. Not only are transparency and openness key values for a company to have, there also needs to be a long term commitment and road map to upholding them.

Pitfalls and potential problems to consider

Whilst showing a commitment to ESG is becoming increasingly important for a company’s marketing, it is critical to note that ESG is still in its infancy, especially when it comes to providing a global and standardised framework for what might be classed as positive or negative in terms of ESG. This can have a negative impact on a company’s marketing. Companies who use ESG as a marketing hype, yet do not deliver on their promises, are subject to accusations of greenwashing. It is dangerous for companies to rush ahead and jump on the ESG bandwagon when it comes to marketing. The strategy has to be thoughtful and considered in order to ensure trust is created between businesses and their clients.

If you would like to learn more about our ESG marketing strategies, contact Kate Horne at kate@lacewingmedia.com