Analysis

Why corporate communications managers need to measure ESG

By Austin Ayaosi

In the past five years, conversations around Environment, Social and Governance (ESG) and Sustainability have shaped the business world more than any other topic in terms of the conduct of businesses in the society in which they operate and the world at large. It is believed that the ESG performance of an organisation plays a crucial role in enhancing the reputational standing of the organisation, investors’ confidence in the organisation, financial performance of the business, corporate culture, diversity and inclusiveness, employees engagement, regulatory compliance, as well as the ability to attract new investors, especially impact investors to the organisation.

A report by McKinsey in 2019 believes that a well-positioned ESG strategy drives higher value creation for an organisation. If that is the case, then, an organisation must communicate its ESG initiatives to all stakeholders. Interestingly, telling the ESG story rests on the corporate communications or public relations unit.

The corporate communications or public relations unit plays a significant role in shaping how stakeholders perceive the efforts and impact of an organisation in making the world a better place for people and society without compromising the ability of future generations to meet their needs.

The role encompasses communicating the ESG purpose of an organisation and aligning it with the corporate vision and values of the business, creating an authentic and compelling narrative of ESG milestones, getting chief executive officers and other key management officials to talk about the organisation’s ESG purpose, roadmap and achievements while ensuring message fidelity, credibility and transparency, as well as monitoring, measuring and evaluating the impact of ESG communication.

In 2022, BrandImpact Consulting, a public relations measurement, evaluation and research firm introduced a custom metric that helps public relations and corporate communications managers track, measure, evaluate, and benchmark the ESG performance of their organisations against industry peers. The introduction of the ESG custom metric was premised on the need for public relations and corporate communications managers to pay more attention to ESG and deliberately infuse ESG content into communications strategies.

To put it in perspective, in July this year, Euromoney named First Bank of Nigeria the winner of Best Bank in ESG at the 2024 edition of the Euromoney Awards. The award was based on FirstBank’s implementation of an ESG-based management system, the funding of renewable energy projects to support Nigeria’s transition to green energy, and a fifty-thousand tree-planting campaign in partnership with the Nigeria Conservation Foundation.

The award highlights the importance of a well-articulated ESG communication strategy. FirstBank is not the only bank in Nigeria that invests in green energy solutions, climate change mitigation initiatives, waste management, emission reduction, and other sustainable projects within the ESG framework. But telling the story of impact, which is predominantly the responsibility of the corporate communications or public relations unit can make a huge difference.

Between 2015 and 2022, BrandImpact Consulting pioneered several custom metrics to help public relations and corporate communications managers track, measure, and evaluate the cost-saving effectiveness of public relations and corporate communications, changes in corporate reputation and ESG performance.

Measuring and evaluating the ESG performance of an organisation from a public relations standpoint provides actionable data and insights into ESG maturity of the organisation, ESG performance of an organisation as an independent brand, ESG performance of the organisation in comparison with industry peers, and the overall impact of an organisation’s ESG performance on the business, employees, shareholders, investors, customers, business partners, industry regulators, and other stakeholders, which on the long run deliver enhanced value to both the organisation and its stakeholders.

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