An increasing number of investors are factoring an organization’s environmental, social and governance (ESG) programs into their investment decisions. More than a quarter of global investors in the Capital Group’s annual ESG Global Study reported that ESG is central to their investment approach, up more than 7.5% in just a one-year span.
ESG initiatives are equally important to talent acquisition, with 84% of employees reporting that they are more likely to work for a company that stands up for environmental issues and 83% more likely to work for a company that stands up for social issues, according to PwC. Buyers expect similar commitments, noting they are also more likely to buy from companies that support environmental (80%) and social issues (76%).
With investors, talent and buyers all scrutinizing companies’ environmental and social efforts, having a meaningful ESG program is just smart business. Where do you start? For most of the tech companies we work with, the process is two-fold.
Determine your own ESG roadmap and integrate it into your corporate communications strategy.
How is your company making an impact on the world at large? How does it want to be making an impact? What does your company stand for? How can it further those ideals? What processes and programs are needed to bring those impacts to life in a meaningful way? How will those programs be governed? How will they be measured and communicated?
Answering these questions will help you start your roadmap. The most important consideration is that whatever you decide, wherever you focus, you take a hard look internally to find what is meaningful and real to your company. The commitments you choose should be fostered in your culture and not just for show. From tackling macro challenges such as climate change and human rights to local issues like housing affordability to drug crises, ESG programs can be as diverse as your talent- and customer-base.
Determine whether your technologies play a role in helping your customers meet their own ESG objectives.
With clients in healthcare technology, cleantech, edtech, fintech, cybersecurity and beyond, we work with a variety of brands that help their customers meet, measure and govern their ESG goals. For example, one automotive tech company helps fleets optimize their fuel efficiency and reduce cargo waste. Supply chain tech clients are also monitoring and eliminating waste. Fintech clients are improving the financial infrastructure for unbanked communities. HR tech companies are reducing bias in the hiring process.
But frequently, tech companies aren’t clearly articulating the value they are bringing to ESG programs. Worse – they may not have even defined that value yet. Determining your technology’s role in ESG starts with a deep understanding of your personas. Are they accountable to ESG goals? Are they using your product in surprising ways? These answers can help you understand if your company can contribute to ESG initiatives, and if so, revamp your messaging and corporate communications strategy to speak to these benefits.
Today, it’s the businesses that stand for something that stand out.