How sustainability narratives are evolving
David Willans, Director, Sustainability at Bladonmore, explores the imperative of the new, emerging sustainability narrative.
BlackRock’s recent change in the way it is engaging with companies has made headlines. It is shifting its focus to stress the importance of ‘financial resilience’ more than sustainability issues. This doesn’t mean it is ditching sustainability; it is maintaining the priority of, as it says, key macro trends like climate and the low-carbon transition.
What it is doing is getting more specific on the ESG issues that tie more directly to a company’s financial future, as opposed to the often-vague messages around the benefit of society as a whole. This is a trend we see mirrored across certain other more sophisticated corporates, too.
The emergence of this new sustainability narrative is, in part, a response to the growing, anti-ESG push in the US. The movement claims that business action on ESG issues is driven by political motivations rather than a route to stronger fiduciary-duty performance.
Advocates want proof – not generalisations. And issues once talked of as long term, are having impacts here and now. Regulators, consumers and employees are increasingly acting on their concerns for environmental and social issues. But let’s be clear: it is not everything, impacting everyone. How material an issue is will vary across sectors, locations and individual companies. Plastics may not be crucially important to Southwest Airlines, say, but it’s business critical for Nestle. Such thinking now has to be grounded in a company’s sustainability narrative too – the better-placed corporates have already taken that path.
What good looks like
Specificity and maturity are undoubtedly in. Coca-Cola, for example, is already doing this well. One of its material issues is water. In the first sentence of the relevant section of its sustainability report it immediately explains why water is critical in the creation of its products, as well as life in the communities it operates. It then dives deeper, into specific actions, plans and goals that the business must achieve to ensure water quality and abundance in the future, de-risking water as an issue for its own future, and ensuring its own long-term financial success. By grounding the narratives in reality, the specificity increases believability.
Catch all ‘doing well by doing good’ is out. As people wrestle with their own impacts and the cost of adapting their own lifestyles to be healthier, cleaner, fairer, and lower impact, they know it takes hard choices. The naivety of overly-positive narratives comes shining through. This tone of messaging certainly doesn’t feel as strategic and serious as business in general either. It’s not fair to point out any one company, but have a search, and a read and you’ll see what I mean.
What it means for you
In 2024, 40% of the world’s population will experience political campaigns ahead of going to the polls. This will put social and environmental issues at the forefront of minds like never before across the globe. And those businesses with older sustainability narratives will not only look more out of touch, but they may also find themselves more under fire from performative political campaigning.
While there’s more to the new emerging sustainability narrative than specificity and maturity, it’s a good place to start when updating your own company’s thinking.
If you want help updating your existing sustainability narrative before it gets out of date, get in touch.