ESG Initiatives Require Clear, Compelling Communication

The general public often views corporate environmental, social and governance (ESG) initiatives as mere lip service: proclamations that companies make to appear to be doing the “right” thing in an effort to appease the demands of social-activist investors or the requirements of large pension funds, green bondholders and other institutional investors. 

For their part, investors, regulators, environmental groups and other nongovernmental organizations cast a skeptical eye on corporate ESG claims. Such groups are always on the lookout for “greenwashing,” a term that refers to companies marketing themselves as environmentally conscious when, in fact, their actions fail to live up to their words. 

A closer look reveals that far from being superficial or perfunctory gestures, ESG initiatives require extraordinary commitments of corporate resources, management time and employee engagement, and will be a top-of-mind topic in 2023. What’s behind this disconnect between public perception and corporate reality? Why do our communication efforts fail to resonate as well as they could when it comes to ESG?