Q&A: Lars Voedisch – Transparency, Authenticity, and Trust are Crucial in ESG Communications

The PR industry is the first line of defense when it comes to ensuring proper and ethical ESG reporting so it’s important to get it right.

Scanning the weather headlines just about anywhere in the world one can’t help but get the feeling that something is a tad off with the climate. A hurricane in San Diego?! Say what?

As such, people are starting to not only demand answers for what’s going on but also accountability. Not just from their governments, but from the brands they engage with as well.

And, in this era where Environmental, Social, and Governance (ESG) values have become pivotal in shaping the corporate landscape, the public relations (PR) industry stands at a crossroads – with some having faced allegations of enabling or even leading greenwashing strategies for their clients.


 

In the wake of the shadow greenwashing casts on the reputation of global PR firms and the brands they represent, it is now more important than ever for the PR industry to embrace and understand that accountability and transparency in ESG communications are not just a matter of business ethics–it’s a strategic imperative.

To get more insight into these important issues, we recently caught up with Lars Voedisch, Managing Director of PRecious Communications, for his take, and advice, on how both communications companies and the brands they represent can adapt to the changing times.

In a survey last year, 58% of executives said their organization has overstated sustainability efforts. What drives this messaging strategy when research suggests that consumer loyalty will more likely go to brands that are completely honest about their ESG actions and intentions?

In today’s business landscape, there is growing pressure from various stakeholders, including customers, investors, and regulatory bodies, for companies to demonstrate their commitment to environmental, social, and governance (ESG) principles. This is why executives may feel compelled to overstate their sustainability efforts: to meet expectations and avoid negative consequences.

There is also the factor of perception – executives understand that there is a demand for sustainability-related messaging, and having one means attracting more customers. This can lead to brands making bold and sometimes overstated claims about their sustainability efforts.


 

What role does the PR industry play in ensuring that brands take accountability as a way of establishing trust with their consumers and how can the industry help to raise the bar for ESG communications?

Transparency, authenticity, and trust are crucial in communication, especially for ESG. The PR industry should be the advocate for greater transparency and disclosure in ESG reporting.

“You can say that the PR industry is the first line of defense when it comes to ensuring proper and ethical ESG reporting. Our clients and intended audience are responsible for ensuring that all communications are authentic, transparent, and true.”

This includes checking facts and data and critically evaluating claims made to ensure that information about sustainability initiatives, progress, and goals are easily accessible to stakeholders and follow industry best practices and reporting standards.

You can say that the PR industry is the first line of defense when it comes to ensuring proper and ethical ESG reporting. Our clients and intended audience are responsible for ensuring that all communications are authentic, transparent, and true.

How do you navigate the ethical terrain of ESG communications to ensure authenticity and credibility in your clients’ messages?

Navigating the ethical terrain of ESG communications to ensure authenticity and credibility in your clients’ messages begins with understanding the client’s ESG efforts–what they have done so far, what they plan on doing, and why they’re doing it.

It’s important for PR professionals to advocate for transparency of disclosure and for clients to share detailed information about their ESG practices, as transparent reporting is essential for building credibility and trust.

Clients should also be encouraged to verify and validate their ESG claims through third-party assessments and third-party audits, as independent validation adds credibility.

“It’s important for PR professionals to advocate for transparency of disclosure and for clients to share detailed information about their ESG practices, as transparent reporting is essential for building credibility and trust.”

A well-deployed PR strategy builds corporate brand equity and can also deep-dive and highlight a company’s various ESG milestones based on who they most resonate with. Showcase how their actions make a difference in environmental conservation, social well-being, and governance practices through meaningful and impactful storytelling–this is where PR shines.

How can PR professionals balance storytelling and transparency in ESG communications?

It’s important to focus on showcasing the real-world impact of the client’s ESG initiatives. Use real, vetted data, and most importantly, be honest about both achievements and challenges–transparency is far more important when it comes to building trust than using inflated numbers

In ESG communications, it’s vital to offer stakeholders clear and accessible information about the company’s sustainability journey, fostering understanding. Pursuing independent audits and verifications for ESG claims is essential to bolster credibility. Additionally, openly acknowledging areas requiring improvement demonstrates a commitment to transparency and a realistic approach to ESG goals, further building stakeholder trust.

“It’s important to focus on showcasing the real-world impact of the client’s ESG initiatives. Use real, vetted data, and most importantly, be honest about both achievements and challenges.”

What are some of the hard questions that PR professionals need to be asking their clients when communicating about ESG? What are some of the red flags that could indicate that a client is greenwashing?

PR professionals should ask probing questions to ensure transparency and authenticity when addressing ESG (Environmental, Social, and Governance) matters. Here are some hard questions to pose to clients:

  • How do your current business practices align with your stated ESG commitments? Can you provide concrete data and examples?
  • What are your long-term strategies for sustainability and social responsibility? How are you measuring progress?
  • Do you actively engage with stakeholders to gather feedback on your ESG initiatives? How are you responding to their concerns and suggestions?
  • Can you demonstrate the independence and expertise of your ESG reporting and auditing processes? Are external third parties involved in verifying your claims?
  • How do your ESG initiatives impact your bottom line, and how are you balancing profitability with sustainability goals?

Here are some red flags that might indicate greenwashing, the deceptive practice of making misleading or exaggerated claims about environmental responsibility:

  • Vague or unsubstantiated ESG claims
  • ESG initiatives that seem more like marketing campaigns than substantive changes
  • Inconsistencies between stated ESG goals and actual business practices or products
  • Legal actions or regulatory scrutiny related to ESG claims
  • Unwillingness to disclose information about ESG performance or resist transparency in any way

Genuine ESG commitment requires transparency, ongoing improvement, and a holistic approach to sustainability.

By asking these hard questions and watching for red flags, PR professionals can play a crucial role in ensuring their clients’ ESG communications are authentic and aligned with their actions.

Beyond simply communicating ESG initiatives, accountability for actual impact and results is essential. How can internal or external communications teams ensure they are not just talking the talk but that the company they represent is also walking the walk?

It’s important for communication teams to collaborate closely with the company’s sustainability team to comprehensively understand its ESG goals, strategies, and performance, fostering effective and authentic communication. Transparency is paramount; openly share the company’s ESG performance, including challenges and setbacks, to enhance trust and credibility. Utilize data and metrics to gauge and report the company’s ESG impact, underscoring dedication to ESG and accountability for outcomes.

Here are some specific examples of how communications teams can ensure that their ESG communications are aligned with the company’s actions:

  • When creating ESG communications, collaborate with the sustainability team to find concrete examples of initiatives and results. This ensures that communications are based on facts supported by data.
  • Use clear and concise language in ESG content, avoiding vague or exaggerated terms. Be honest about challenges and setbacks in ESG performance, building trust with stakeholders by sharing progress and action plans.
  • Utilize data and metrics to measure and report on ESG impact, showcasing commitment and accountability. For instance, share metrics like greenhouse gas reductions, water conservation, and employee satisfaction rates to illustrate progress.

What are some examples that you admire of brands that have gotten their ESG communications right? 

Here are some examples of brands that I admire for their ESG communications:

Patagonia: Patagonia is another company that is known for its commitment to sustainability and social responsibility. The company’s mission statement is “We’re in business to save our home planet,” and it has a long history of supporting environmental causes and promoting social justice.

Patagonia’s ESG communications are clear, concise, and authentic. The company is not afraid to speak out about issues that it cares about, and it is transparent about its own challenges and setbacks.

In September 2022, Patagonia founder Yvon Chouinard announced that he was giving away the company to a charitable trust, the Holdfast Collective, and the Patagonia Purpose Trust. The Holdfast Collective will receive all of Patagonia’s profits and use the funds to combat climate change. The Patagonia Purpose Trust will oversee the company’s environmental and social mission.

“By asking these hard questions and watching for red flags, PR professionals can play a crucial role in ensuring their clients’ ESG communications are authentic and aligned with their actions.”

This move was seen as a bold and innovative step in the world of ESG (environmental, social, and governance) investing. It is also a sign of Patagonia’s long-standing commitment to sustainability and social responsibility. Patagonia’s campaign is a powerful example of how businesses can use their resources to make a difference on important social and environmental issues. It is also a reminder that ESG investing is not just about making money, but also about making a positive impact on the world.

Another example is Apple reporting to Mother Nature. While a company can publish an environmental and sustainability report, it often goes unnoticed by most. However, Apple’s approach differs significantly. They recognize the true purpose of such a report – to effectively communicate their environmental efforts to a wider audience in a clear and understandable way.

The “Mother Nature” campaign has been praised by environmental groups and consumers. It has also helped to raise Apple’s profile as a leader in sustainability.

Mother Nature is shown sitting in a meeting with Apple executives, including Tim Cook. She asks them how they are reducing their carbon footprint and what they are doing to protect the environment. The executives explain Apple’s various sustainability initiatives, such as its use of renewable energy, its commitment to recycling, and its goal of becoming carbon neutral by 2030.

Mother Nature is impressed by Apple’s progress, but she also tells them that they need to do more. She says, “We need to work together to protect the planet for future generations.”

The campaign is a powerful reminder of the importance of environmental sustainability. It is also a call to action for other businesses to follow Apple’s lead and take steps to reduce their environmental impact.

Apple’s ESG goals are ambitious, but the company is making progress. In 2022, Apple announced that it had achieved 100% renewable energy for its global operations. The company is also on track to meet its goal of becoming carbon neutral by 2030.

 

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