With great power comes great responsibility. Venture capitalists and investors have woken up to the sage advice once given to Spider-Man. Now it is not only the commercial credentials that hold great influence in the decision to invest in a company, but their environment, social and governance (ESG) credentials too.
And we’re not just talking about Impact Funds. The Limited Partnerships – pension funds, endowments, insurance companies – that private equity and venture capital funds raise capital from are now demanding more sustainable investing. This means that it has become a commercial priority to not only show that investments hold the potential for a great ROI, but are responsible businesses.
And there are of course other benefits for startups that indirectly impact the decision to invest. Boosted brand reputation, improved employee branding and talent acquisition, and mitigated risk against new regulations in this space can all help position the company as a more favourable investment.
Companies therefore cannot just rely on brand and product promotion to secure investment – they need to communicate the responsible way in which they operate too.
So, how can startups and scaleups best promote their ESG credentials?
Identify your strengths
Start by understanding where your ESG credentials really lie. Don’t try and engineer ESG factors that aren’t true of your business because you’re trying to match the claims of someone else in your market. Any holes poked in unsubstantiated claims may put the validity of your real efforts into doubt.
It’s also important to understand where your true strengths. You can’t be known for everything, and a continuous stream of scattergun updates can be confusing to those trying to understand your strategy and impact. Focus on where you can make the greatest impact, based on your company’s strengths and the most relevant ESG challenges to your organisation and industry.
Articulate your purpose
Every Miss United States contestant calls for world peace – or so the joke from Miss Congeniality would have us believe. An admirable goal, but, whilst there are always exceptions, not one that feels particularly relevant to the contest or one that we would expect a Miss United States contestant to tangibly help achieve.
When devising and articulating your purpose, consider its relevance to your organisation, industry and customers. This is a goal that you are committing your organisation to work towards, and it needs to be one that is credible: one you are genuinely motivated to achieve and where you believe you can make a real contribution.
Actually do it
This isn’t a point about your communications strategy – but it is essential if you want to communicate around your ESG credentials. It’s not enough to say you’re doing something or fighting for a goal when the most you are doing is posting a black square on your corporate Instagram or sharing statements of solidarity on LinkedIn. Eighty-eight per cent of institutional investors now subject ESG to the same scrutiny as operational and financial considerations. Lip service isn’t going to cut it.
Embrace partnerships and known initiatives
You don’t get brownie points for doing it alone. So, do your research on which partnerships or initiatives you could contribute towards. Known initiatives – for instance, signing up as a Tech Zero signatory – will also make your efforts easily recognisable to potential investors.
Or, if you do genuinely have a great new idea on how to approach the issue, consider who else you can engage to make it even more successful. These could be other industry players with complementary expertise, or those working within the environmental or third sector.
Show the evidence
As we’ve said before, it’s not just enough to say you’re doing something. Data is critical to show your impact – whether that’s the positive contribution you are making to a cause or the negative impact you are reducing or offsetting. And celebrate the journey that you are on. No one expects the impact to be immediate, so promote key milestones and update on your progress as part of your momentum announcements.
Your organisation’s ESG goals will inherently be working to resolve a very human issue. And it’s therefore key to humanise your comms around what you are doing and why. It shouldn’t just be a topic for corporate press releases – it needs to be people-first communications.
What do we mean by that?
- Show your passion – A founder or senior leader needs to be able to speak passionately about the issue and the importance of overcoming it. Drawing from personal experience can make it even more powerful.
- Tell the whole story – Don’t just tell people what you are doing and expect them to care. Make sure your audience know why you are doing it and the difference that your actions are making.
- Encourage employee contributions – Whether they’re hosting STEM workshops in disadvantaged schools or building a new app for a charity partner, encourage your employees to share their contributions. Develop employee-authored content and reshare their social posts on the corporate channels (with their permission) to promote the work your team are doing authentically.
- Engage with the wider community – Don’t pretend you’re the only one out to solve this problem. Engage with and celebrate the efforts of others within your industry and beyond that are helping to improve the situation.
- Remember it doesn’t need to always come from you – If you are partnering with a specific charity or initiative, think about how you can use your resources to help elevate their voice. Just as with customer success stories, third-party endorsement drives real credibility.
Would you like help promoting your ESG credentials and the impact that your organisation is making? Get in touch with us at [email protected],