Sustainability has been a catchphrase for a long time, and particularly so in banking. But if you want to be at all convincing, there are a few things you need to keep in mind, writes Marionna Wegenstein in an article for finews.first.
This article has been published on finews.first, a forum for authors specializing in economic and financial topics.
It has become a clear competitive advantage for companies to have a sustainable business strategy adhering to environmental, social, and governance criteria, or ESG. But when they choose to follow that path, they also have to communicate in ways consistent with that kind of behavior. Moreover, doing so not only significantly raises their profile but better prepares them for crises.
But what does it really take? First, a distinction must be made between the communication of sustainability and sustainable communication. The first references a company's sustainable economic and social activities, while the second relates to the sustainable design of communication processes.
«Communicating responsibly means that the messages are sincere»
In practice, communications professionals would ideally cover both. On the one hand, the messages must be sincerely formulated and consistent with the company's activities and promises. That makes sure that there is consistency between content and action.
On the other, it is not only the content of the messages themselves – but the choice of dissemination methods that are important. They must take into account environmental and social issues while encouraging interaction with stakeholders.
The goal of sustainable communication involves positioning companies in the public eye according to ESG criteria. It should be aimed at strengthening the brand among all stakeholders, and building trust in the company's actions. Having an ESG-compliant image also ensures better ratings by rating agencies. It appeals to new investors and helps open up new markets. Importantly, it improves employee morale while also attracting a better-qualified workforce.
«Sustainable communication is also proactive crisis and reputation management»
Society's values have changed considerably. It is becoming important for companies to maximize profits while assuming some societal responsibility. They should also contribute to general well-being.
Relevant players, including those in the financial industry, are being monitored by a wide range of interest groups, making a sustainable corporate strategy increasingly important. Any violations of social norms and values prompt immediate, negative reactions and the resulting economic damage can impair growth while also potentially leading to a serious loss of reputation.
Given that, companies that clearly formulate messages and make sure that activities are in line with their ethical criteria are better positioned in crisis situations. In other words – sustainable communication is also proactive crisis and reputation management.
«Creating the best conditions for sustainable communication»
None of this, however, prevents companies from behaving in a manner that is only sustainable on a superficial basis and whose only, real goal is simply to maximize profits. Suppose there is no solid basis behind their approach but they have shaped external perceptions in such a way that they are perceived as environmentally friendly and responsible. In that case, they are «greenwashing» as they cannot live up to the claims in reality.
To avoid this, they should ensure that communications are not based on empty promises – such as vague statements, insufficient information, suggestive images or false labels, and even bold-faced lies. There are four main ways that companies can create optimal conditions for sustainable communication:
- Transparency: do good and talk about it, and talk about it when things don't go so well.
- Credibility: actions first, then words.
- Dialog: sustainable communication is not a one-way street; listen to stakeholders and provide feedback.
- Consistency and creativity: keep the flow of information going; think about the wider picture, look at problems from different angles; entertain and surprise your target group.
Marionna Wegenstein is an independent communications advisor based in Zurich. Her company Wegenstein Communication mainly serves clients from the financial sector and family businesses. She is co-founder of the Family Governance Competence Center, a network of experts for all questions relating to family businesses. She has more than 25 years of communications experience in the financial market and most recently was head of public relations and communications at the Swiss private bank Lombard Odier. Before switching sides and becoming a PR executive in the corporate world, she worked for several years as a journalist.
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