Businesses will need to substantially boost investment in ESG compliance, as well as market engagement and reporting, in order to meet global benchmarks and stakeholder expectations, according to a new report from Brisbane-based consultancy BBS Communications Group.
The group has focused the growing significance of ESG to business, and in particular corporate communicators, with the launch of its new CommsWatch report series.
BBS Communications Group Head of Research and Analytics, Amanda Firth said the series focused on pressing economic and social trends and issues: “As Australia works towards achieving net zero emissions by 2050, and regulatory requirements continue to evolve, ESG reporting is firmly in the spotlight. Together with growing stakeholder, public and media scrutiny, there is significant pressure on businesses to better understand, act and report on ESG factors, which made it a fitting topic for the inaugural edition of CommsWatch.
“As custodians of internal and external communications which outline and promote an organisation’s ESG-based efforts, marketing and communications leaders and teams play a direct role in ensuring the accuracy and transparency of any claims made.”
The report found a series of recent global and Australian developments have intensified the urgency for all Australian businesses - public and private - to advance their ESG efforts and reporting: “The specific issue of greenwashing has been a key focus for both the Australian Competition & Consumer Commission (ACCC) and Australian Securities & Investment Commission (ASIC) this year, with the latter launching its first greenwashing-based legal action in March 2023,” Amanda said.
“The Australian Treasury completed its second round of consultation into climate-related financial disclosure in July 2023 and just last month, the ACCC closed consultation of its draft principles aimed at improving environmental and sustainability claims integrity.
“As regulatory requirements sharpen over the coming years, communications professionals will need to deploy robust strategic, analytical, communications and engagement skills, and to collaborate closely with key technical specialists across areas like assurance and risk, financial relations, operations and policy development.”
In terms of media, the report found there to be numerous ESG-focused media outlets around the world, with local mainstream, business and industry-focused outlets covering related issues: “This presents both an opportunity for organisations to profile their efforts, as well as a need to boost their readiness to provide accurate and compelling proof points to journalists,” Amanda explained. “Reporting frameworks, tools and analysis will be key to tracking and reporting on claims in ways that make sense to clients and customers, investors, financiers, collaborators and decision makers.”
The CommsWatch report highlights three key areas communicators need to be across:
- Understanding consumer and stakeholder sentiment - Tracking and / or conducting research into the ESG-based stakeholder perceptions and expectations of your business or industry.
- Agitating against greenwashing - Reputational damage aside, Australian businesses are now facing very real compliance and legal ramifications for making unfounded environmental claims, particularly where they influence investors and stakeholders.
- Sharpening the focus on "S" in ESG - Diversity, equity and inclusion form a major part of the “S” in ESG, while other key factors include workplace health and safety, supply chain, labour policies and data security. Communicators need to be ready to integrate more of these factors into their work and to be mindful of forthcoming standardisation of reporting requirements.
The report concludes that effectively tracking, measuring, supporting and publishing corporate sustainability claims will need more robust frameworks, tools and analysis. For communications leaders, this will require greater strategic, analytical, communications and engagement skills than ever before.
The full BBS Communications Group CommsWatch report can be found here