Why you need to align communications with your embedded sustainability strategy

This is part of a series about how companies can integrate sustainability into their core business strategies. The previous articles in the series describe how to assess your company’s sustainability strategy, identify material ESG factors and stakeholders, develop your company’s business strategy, make the internal business case for sustainability investment, cultivate a culture of sustainability, and optimize board governance. This article describes how to align communications efforts to best capture value from embedded sustainability initiatives.

Successfully embedding sustainability into core business strategy has several benefits: It can help pinpoint material issues, identify key stakeholders, drive better financial performance, build a positive culture, and optimize governance as we’ve discussed throughout this series. But it’s difficult to get these initiatives off the ground or capture their full value if an aligned and authentic communications strategy is missing. Comprehensive communications is not a one-and-done endeavor. Instead, it’s an ongoing effort that requires careful consideration of each stakeholder group as a unique audience. Here’s a guide to setting your company up for success when it comes to relaying the narrative of impact. 

Think about internal communications first

Companies often focus first on external communications to tout sustainability efforts, but the work begins with internal alignment. It’s essential to build a culture of sustainability, impressing upon employees that it’s an embedded part of the organization’s strategy and encouraging their participation. This starts with high-visibility and consistent communication about sustainability goals and progress. Organizations should form two-way channels so top leadership can demonstrate that sustainability is a priority, and employees on the ground can voice their opinions about innovations, achievements and challenges. For example, Nespresso employees visiting coffee farms are encouraged to send videos to showcase their sustainability commitments in action. Engaging all internal stakeholders makes them feel part of the mission and success. 

When done well, companies can enjoy recruitment and retention benefits. An IBM Institute for Business Value study found that 68 percent of respondents reported higher willingness to accept a position from environmentally sustainable companies. In most studies, the younger workforce demonstrates an even stronger preference for employers committed to sustainability.

Incorporate the message into corporate communications

With staff engaged in a common process and vision, sustainability efforts can then be communicated to external partners with credibility and transparency. First, this means honing the definition of what sustainability means to your organization, your products and services, and your stakeholders. Companies should take this definition, which can be accomplished through the materiality matrix, and incorporate the messaging throughout the corporate narrative. If the previous steps were done well, it should fit within the existing brand story and appear on the website, social media, and in marketing materials.

Much like sustainability strategy, sustainability communications cannot exist in a silo. It’s best to include progress within the overall annual report, not solely in a separate impact or sustainability report, to send the signal that it’s fully integrated into the core business strategy. Unilever’s annual report achieves this, incorporating sustainability across the report to show how sustainability strategies are embedded into overall strategic goals in addition to a specific Planet & Society section. 

Hesitation to make bold, public sustainability claims in fear of falling short is understandable. But iteration is part of being ambitious, and transparency is key to trust. Again let’s consider Unilever, a longtime sustainability champion, who recently re-evaluated its strategy to focus on “fewer things, done better, with greater impact.” That is a tough message to share for a decades-long category leader.  But the company communicated honestly about how it determined targets, where it fell short of goals, what it learned, and how it needed to re-engage in the mission. 

Engage the financial community through investor relations

Sustainability initiatives require capital and buy-in from investors who supply it. There’s an increasing interest in ESG from investors who understand the critical materiality of sustainability on business performance and, for the more savvy investors, potential value creation opportunities.

For public companies, sustainability metrics can be incorporated in SEC 10-K filings, investor days, annual reports and quarterly calls to ensure all shareholders are well-informed. For private markets, ESG questionnaires are often included in the due diligence phase, and over the last two decades, the use of ESG criteria as an investment component has increased significantly. According to a PwC survey in 2023, 90 percent of private equity firms reported integrating ESG-related risks and opportunities into transformation plans, and 80 percent say considering ESG performance is in line with the pursuit of returns.

Thus, being fluent in how sustainability relates to the business operations and growth potential is now an essential part of investor relations.

Reinforce the message through customer and consumer marketing

With internal employees on board and corporate communications in motion there is ample opportunity to share these messages with consumers as they consider your product or service. This is the chance to tell a story of real impact — on the planet, on the community and on the consumer. Research from The New York University Stern Center for Sustainable Business (CSB)’s Sustainable Market Share Index shows a growing demand for consumer packaged goods (CPG) marketed as sustainable, which now comprise an 18.5 percent market share, yet represent nearly one-third of the market’s growth. What this shows is that companies should focus on clear, honest and transparent claims that differentiate your product, tie into your brand narrative and build loyalty. Third-party certifications can help bolster credibility with consumers at a time of heightened consumer consciousness and suspicion of greenwashing.

Despite the assumption that sustainability claims are inherently political, research from CSB in partnership with Edelman shows the strongest environmental sustainability claims perform well across demographics and political party lines, and when added to a product’s core claim (such as detergent claiming it cleans clothes or chocolate claiming it tastes delicious) can amplify brand reach by up to 33 percentage points.

Finally, consider the companies that supply yours with products and services. B2B companies will have distinct communications strategies from those that reach consumers directly, but if the end user is demanding sustainability, the full value chain needs to be a part of supplying it. B2B businesses are critical to help meet their clients’ sustainability goals and substantiate their own sustainability claims. For example, Domtar is a pulp and paper company that works with its customers to communicate sustainable sourcing and packaging benefits so they can market the sustainability benefits to their end-users.

Keep government and regulatory issues in mind

The role of government in corporate sustainability communications is evolving. On one hand, new regulations are mandating ESG disclosures. On the other, regulators are holding companies accountable for misleading marketing claims. While this could have a chilling effect, the number of such cases declined 12 percent between June 2023 and June 2024 from the year-earlier period. The drop was most notable in Europe, where Corporate Sustainability Reporting Directive (CSRD) reporting is now required. This would suggest transparent reporting may lead to more authentic communications.

Ultimately, communications are only effective when corporate behaviors align. It starts with an embedded sustainability strategy, and uses communications to engage and create value from and for all stakeholders. Well-conceived communications — when backed by credible sustainability initiatives — will help companies create competitive advantage with customers and consumers.