Why greener, socially responsible businesses are more competitive – if they tell their stories well
ESG (Environmental, Social, and Governance) storytelling is no longer an optional add-on for businesses – it’s an essential aspect of securing commercial success and growth in 2023 and beyond. In a post-pandemic world overshadowed by the climate crisis, consumers want brands to act more responsibly, and they expect to see evidence of genuinely sustainable efforts across business processes and supply chains. The good news is that investing in ESG initiatives – and communicating them well to consumers – yields tangible business benefits, including higher market share, employee retention, better innovation and a lower cost of capital.
People are increasingly willing to buy sustainable products and are prepared to pay a premium for them. According to recent research by Deloitte, a consulting firm, more than 40% of consumers are already choosing perceived sustainable brands over those they see as less so, and one in four say that they would pay more for sustainable products. Sustainability storytelling is an effective tool for converting noble consumer intentions into action, and brands that are loud, authentic and influential in promoting better choices will enjoy commercial and reputational gains.
In addition to consumers, employees are also a crucial stakeholder group for businesses. Companies with a commitment to ESG targets are more likely to attract and retain talent, especially among Gen Z workers. A recent survey by The Telegraph found that a third of Gen Z workers have rejected job offers based on a company’s sustainability record. A strong brand purpose and alignment with ESG goals lead to better innovation, increased employee engagement and a greater sense of shared ambition and momentum that generates more value.
Leading by example, companies like Unilever – whose sustainable living brands grew 69% faster than others and delivered 75% of the company’s overall growth in 2021 – demonstrate the potential for market share gains from built-in ESG objectives that complement and even enhance commercial growth strategies. By expanding and optimising their existing ESG commitments, Allianz, top–ranked insurance company on the Dow Jones Sustainability Index, has also been able to increase its market share among conscious consumers.
All of this translates into a lower cost of capital. There’s a premium given by many investors and lenders for companies seen to be tackling ESG issues well. The University of Exeter Business School found that companies investing in ESG initiatives benefited from 0.5% lower interest rates on borrowing. Strong policies and strong communications about their approach boost risk management, making them a safer investment.
It’s clear that ESG storytelling is no longer just a matter of doing the right thing for the planet but also the smart thing for business. By communicating real sustainable actions and securing top-down investment and brand-wide buy-in, companies can ensure growth, innovation, and commercial performance, all while helping maintain a healthy and thriving planet for future generations.
How Brilliant Noise helps brands with ESG storytelling
To enhance trust in ESG efforts, marketers must also mitigate the risk of greenwashing. Brilliant Noise’s Test–Learn–Lead™ methodology offers a principled, data-driven and quantifiable approach to storytelling about sustainability.
Test–Learn–Lead™ quickly turns ideas into manageable experiments, enabling brands to focus resources on marketing that drives brand relevance and generates commercial value.
Recently, Nike is using Test–Learn–Lead™ to accelerate in-store storytelling as part of its Move To Zero programme, which is minimising the company’s environmental impact across its supply chain. Despite significant investment in sustainability, the company has faced challenges in effectively communicating its efforts. Brilliant Noise has developed a pipeline of creative ideas and prioritised them, resulting in focused experiments to scale and accelerate Nike’s ESG impact.
Get in touch with the Brilliant Noise team to discuss how to start building your brand’s authentic reputation for sustainability and social responsibility.