Do you consider a brand’s sustainability and environmental practices before making a purchase? It’s likely that you have, especially if you are part of the millennial or Gen Z cohorts. In fact, a brand’s ESG (‘Environmental, Social and Governance’) initiatives are growing in importance across the board – both from a regulatory perspective and to meet consumer expectations. Establishing a vision for sustainability is no longer optional, brands must implement concrete, authentic ESG practices and communicate them effectively to their audiences. That means finding out exactly what your audience cares most about and taking real action. Today’s savvy audiences will see through any performative claims. So where can you start?
First, you must gain a deep understanding of your audiences. When we did research into how consumers believe brand’s should address ESG initiatives, we found that opinions differed among certain groups. For example, fair trade practices are important to me (and a large portion of individuals from my generation), so I’ll be more likely to make a purchase when I see that a brand is prioritizing workers’ rights, safer working conditions and fairer pay. The younger folks that I know are equally concerned about climate change and social justice, and will actively seek brands that are addressing both issues in real ways. There are some issues that we found crossed generational lines, such as “Protecting personal data with strong policies” — with Gen Z/Millennials at 68%, Gen X at 77%, and Boomers at 82% in their belief that this governance issue is critical.
Gender also plays a role in the ESG landscape. While both men and women are similarly likely to start or increase usage of a product or service if the company supports an ESG cause they believe in, men are more likely to stop using a product if the brand’s values do not align with their own. Women value diversity within corporate boards or leadership markedly more than men are more likely to be swayed by initiatives that target animal welfare and food instability.
Understanding these subtleties can help provide a foundation for an ESG practice. I’ve seen my clients have the best success by leveraging a mix of market research methods to build understanding. For example, to help define your best target consumer base, you can conduct foundational research such as awareness and usage studies; needs-based segmentation; and drivers and barriers research for product launches. Further exploration, using methodologies such as integrated measurement of consumer motivations and behaviors, can help you to narrow the scope of your ESG investment to best resonate with your target, all while ensuring the greatest benefit both for your brand and the causes you choose to support.
If you’ve identified the best initiatives to pursue and are working hard at improving your ESG practices, bravo! Take the next step and make sure that your audiences know exactly what you are doing. Transparency is critical, with over 90% of consumers indicating that it is an important factor when making purchase decisions. As consumers, we want to know where our products come from, and similarly, we want to know how brands are aligning with our own values. Brands need to let their constituents know what they are doing on this front. While a company website is a great place to start when communicating corporate ESG practices, research shows that local community-focused initiatives should instead be communicated via press or interview-based communications to truly impact consumer behavior and meet public expectation. Media coverage of a brand’s work can provide that third-party endorsement that builds consumer confidence.
Understanding how best to communicate and where to communicate about initiatives is vital for overall marketplace success and acceptance. With customers, corporate boards, employees and even governmental regulations all demanding great investment in ESG initiatives, it is not the initiatives themselves which are failing to equate to larger impact but the communication of those initiatives which fails to inspire action. A mass email on Earth Day won’t cut it; you must connect the good work that you do with a compelling and consistent narrative across the mediums that matter.
Your consumers are looking for more than just a superficial claim, so that means your corporate ESG initiatives need to be woven into the fabric of your company. Regardless of the size and scope of your brand or service range, there is an ESG initiative to suit every brand and company. Doing the groundwork to understand and truly listen to your audience will help you hone your message and mission to be the most effective and impactful it can be. While meeting consumer expectations is a non-negotiable for today’s competitive marketplace, giving back has additional perks aside from sales and customer perception. Aligning your brand with a complimentary ESG portfolio will not only inform the value of your product, but the value of your company as a whole among your key audience members.
About the author
Miriam Konz brings more than 25 years of experience in quantitative marketing research and analysis to clients in diverse industries in her role at AMC Global as EVP of Corporate Strategy and Innovation. Throughout her career, she has primarily led strategic initiatives with an emphasis on product development, market segmentation, product line extensions, pricing and new product/concept testing. Miriam has executed research around the world in geographies from the United States and Europe all the way to Asia, Egypt and South America and has been lucky enough to travel to many of her research locations.