Corporate Reputation
30.04.2021

Here today, gone tomorrow – reputation vs. ESG

Here today, gone tomorrow – reputation vs. ESG

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by Jessica Kirby

Earlier this month, The RepTrak Company released its 2021 Global RepTrak 100 – considered the ‘world’s most comprehensive reputation study’. Naturally, COVID-19 had an impact on brand movement within the Top 100, but not in the way one might expect. The Top 100 experienced their strongest-ever reputation scores.

This indicates that how brands position themselves and respond during a time of crisis is pivotal in consumer perception, even when that crisis is a global health pandemic. Brands must be agile, unwed to campaigns that need to be pulled, and constantly monitoring consumer conversation. 

The rankings are always a good read, and if you’d like to take a browse, you can access them here. But the meatier findings sit within the research conducted with consumers. For the first time this year, the study looked at ESG as a measurable component of reputation. These data points tell a story that all brands should take note of.

The importance of ESG isn’t news to anyone

ESG (environmental, social and corporate governance) is not a new notion for brands. We’ve seen the shift from sharing CSR commitments externally to the push to evaluate a business by its ESG programme. This change is sizeable and it has been particularly noticeable over the past 5 years.

If we look at Google Trends data, there has been a steady rise in searches around ESG, and we’ve shifted from an environment where CSR was miles above the presence of ESG to now, in 2021, where we see that ESG has overtaken CSR*.

One is about accountability, and the other measurement. CSR sees brands making commitments to show they are accountable, but ESG sees brands scored on their intentions and delivery on this.

The study showed that ESG is among the top 2 most important factors for the public across three things: giving a company the benefit of the doubt in a time of crisis, trusting it to do the right thing, and recommending it to others.

In fact, ESG was the top-ranking factor when giving a brand the benefit of the doubt in a crisis. This confirms the weight that ESG carries now. It is the foundational support to help brands weather a crisis.  

Why the disparity in perception vs. commitments?

It’s surprising to see that only four of the top 10 companies in the RepTrak 100 were ranked as having ‘strong’ ESG scores. It would be unfair to state that brands aren’t doing commendable work in this space, but what this does show is that there is a case of perception versus reality.

There are two ways of looking at this. Some of this may be driven by brands declaring initiatives and campaigns and then letting them fall by the wayside. On the other hand, there are cases where brands are dedicating time and energy to this, but then it’s not reaching consumers.

This is where communications come in. Carefully constructed, meticulously thought-through, and aptly timed. This is not about pushing content out left, right, and centre. It is about understanding the challenges of the landscape, the consumer demand and emotion to the topic, and responding to this accordingly.

The generation gap

RepTrak reports that ESG is 1.8x more important to millennials than it is to non-millennials. And when it comes to GenZ, it is the most important decision factor for them. It is no coincidence that these generations are also the ones with the power to tear down brands by leveraging social platforms.

Audience must remain at the centre of ESG communications; what resonates with boomers may be the exact thing that pushes GenZ to call a brand out on social media. Tailored messaging and understanding what your different consumers know, think, and feel will be pivotal in how they then go on to act towards your brand.

Investing in a better future

ESG investing is growing fast, proving an intriguing dynamic for brands as it impacts both their bottom line and their share price. Investors are looking to what a brand says it will do for the world, both today and tomorrow, to dictate their investing behaviours. This growth is set to continue, with KPMG stating an expected 173% forecast growth of the UK socially responsible investing market by 2027.

ESG relies on substantiation. Employees, investors, and customers are privy to the ‘greenwashing’ that occurs. If you take a ‘here today, gone tomorrow’ approach to your ESG programme and communications, you increase the chance of your brand reputation experiencing the same fate – ‘here today, gone tomorrow’.

If you want to chat about your corporate reputation and how ESG and communications work best together, get in touch

*Google Trends data, 2004 – present. Comparing Environmental, Social and Corporate Governance (topic) and Corporate social responsibility (topic), UK only.