It’s easy for anyone to spout a set of lofty ambitions when it comes to diversity, sustainability and social justice. But demonstrating what you’re actually doing and have tangibly achieved is crucial to set the talkers apart from the doers, argued Stephen Gunkel, head of communications, Pictet Asset Management. The fund handles around €250 billion in assets and launched its first water investment fund in 2000, and its first clean energy fund in 2007.
“We're all number crunchers every day in various forms, so you need to have something tangible to show to people. Adding proof to your statements is key,” said Gunkel.
The desire for hard facts can range from how much carbon is embedded in an investment strategy or a company, and what the carbon savings are of an alternative strategy, to how many more women are being put on a board, to a company’s pay gaps, added Sarah Aird. She’s global head of ESG marketing for S&P Global Sustainable1, which uses data intelligence and analytics to help companies boost their ESG performance.
“The more information that we put into the market, the more transparency we provide, the better the decision making will be by the end customer. And that enables us as marketers to differentiate our own products and to address the customer needs in a better, more transparent way,” said Aird.
Data can fuel transparency by backing up marketing messages, said Aird - but marketers shouldn’t underestimate the importance of choosing the right data to tell the most accurate story.
“There are lots of data providers, and you have to make robust decisions based on quality credentials,” she recommended.
“We engage with around 15,000 companies every year to collect their environmental data, and a third of disclosure is actually inaccurate. So you need to ask the right questions of your data providers. Are they scraping data in automated ways, or is there a human interface that's standardising and validating it?”
Yet don’t let a fear of your data not being good enough stop you from integrating it into everything from decision making to communications, Aird added.
“Start integrating the data today into your models, so the resolution of your decision making will improve over time. But if you don't start today, then you're going to be left behind.”
A shared industry framework with a single common language is currently lacking, pointed out Cynthia Birchler, director of sustainability marketing for the Julius Baer banking group. It signed the UN Principles for Responsible Investment in 2014.
“Being able to compare apples with apples would offer us another level of granularity and differentiation, because that's the challenge now - we don’t really know how we compare against the wider industry,” Birchler explained.
“It’s difficult to position a product or offering in comparison to something else. So having a standard understanding will give us better differentiation opportunities.”
Aird would like to see all financial products labeled with a set of standard ESG metrics.
“You know, what is the temperature alignment of that fund? Is it on a 1.5 degree trajectory? Or is it on a three degree trajectory, in which case we might start to ask some questions about the strategy? What is the water dependency or consumption in certain regions where water is scarce? What is the diversity factor? And then that comparison and decision can be better made,” Aird elaborated.
Birchler gave the example of Julius Baer being a global founding and equity partner of the Formula E electric vehicle racing championship.
“That showed how we truly believed in the future of electric mobility, not just from a marketing aspect, but in our ability to develop in-house research and thought leadership,” said Birchler.
“From the beginning, we were convinced it wouldn’t just be a trend, but something that would shape our future. We had to be bold to believe in the initiative. It's not about just signing a cheque and putting a logo on the platform.”
Without such proof points, added Gunkel, it’s difficult to sift through all the claims businesses make and work out what’s credible and what’s not.
“Because there's a lack of evidence of expertise and quality around ESG factors, we don't yet have that trust. I don't think the industry is helping itself by rushing towards marketing messages which are not substantiated with evidence,” he said.
“Over time, hopefully people will be able to build that track record of evidence-based content that they can share with clients, because that's what they’re looking for. They'll be looking for brands that can bring expertise and can demonstrate over time what it is they've tangibly done.”
Want to find out more about how alan. can help you with your ESG strategy and communications? Contact us on 020 3877 3800 or email contact@alan-agency.com.
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