With companies being held to a higher standard than ever before and with their environmental, social and governance strengths now under the microscope. Here is how fintech's can talk about ESG while withstanding this growing scrutiny.
ESG has changed how companies present themselves and is influencing PR decisions from the youngest start-ups to the most established household names.
This means companies must do good in the world, for the environment, for wider society and for the sake of their workforces. Oh, and all while being profitable at the same time.
Consumers, and the press, are no longer ignoring issues such as if a company has an all-male board, if it’s factories pollute nearby rivers, or if it’s not paying employees the minimum wage.
Armies of social media followers are supporting this scrutiny, eager to hold their brands to account. Which is why some PRs shudder when the notifications tab on a client’s corporate twitter account starts to ping with alarming frequency…
Importantly, just talking about ESG issues is no longer enough.
This is because ‘greenwashing’ has been widely identified as a cardinal sin. Consumers aren’t just more aware now, they’re more cynical.
You may think a press release about a client’s support for International Women’s Day will do the trick. But it may be easy for a journalist to look beyond this, and reveal the company is still male-dominated in its leadership.
And the client’s pay gap? Well, the ‘gender pay gap bot’ showed just how much damage superficial PR activity can do…
Greenwashing, the act of claiming to have strong ESG credentials when the truth is far different, can be devastating for a brand. This is why fintech PRs must be extremely careful in how they talk about a client in the context of ESG.
Getting the message right
First, it can be easy to get swept up in the buzz around ESG.
For the brands with the right values, it has given them great publicity which has translated into growth, especially if the company revolves around ESG. For example, an app designed to help female investors navigate the gender inequalities in the financial system. Or a program that helps households calculate and reduce their carbon footprint.
That’s great for these brands, but don’t try and force the ESG issue with your clients.
It is important to understand ESG is part of what a company does, not its overall objective (unless it explicitly is).
If your client has specific and demonstrable ESG strengths, such as in hiring policies, charitable work and environmental initiatives, then great – publicise these!
But it is important to not force the issue. It is ok if your client is not an ESG champion, but falsely acting like they are will inevitably attract unwanted negative publicity.
Second, be realistic and honest.
If a company is weak on an ESG issue, that’s one thing. Trying to hide this? That can quickly take matters into scandal territory. Journalists just love a conspiracy and signs of a cover up.
Therefore, be prepared for the issues your client may get quizzed on.
You can quickly take the wind out of their sails and nullify some of the sexier aspects of a story, with a statement that frankly admits fault and builds towards a resolution. Don’t rely on the age-old ‘no comment’.
Third, show your methodology.
Previously, some management teams have simply turned a blind eye to their ESG weaknesses.
Ignorance is no longer bliss. It is time to be more aware and ensure your client is transparent about these issues.
For example, on your client’s website consider including a section on the company’s carbon emissions and how these are calculated. This shows the press – and by extension, consumers – how seriously the company’s management team takes ESG matters.
The press is more willing to challenge companies based on their ESG metrics than ever before, so be prepared for this scrutiny and talk about it seriously.
Avoid cliches and, if possible, keep jargon to a minimum. We’ve all seen statements from companies about ESG scandals riddled with marketing spiel and empty rhetoric. This is tantamount to greenwashing and is counterproductive.
ESG, regardless of your opinion on it, is here to stay and cannot be treated as an add on. It’s integral to a business and its operations. If it isn’t really to your client, don’t say this but still be prepared to talk about the ESG weaknesses and strengths that do exist should they be scrutinised.
Remember, there’s no point in trying to hide. Be transparent, honest and realistic about ESG. Trying to be anything else (greenwashing or otherwise) will not work.