Companies today play an increasingly important role in the transition to a more sustainable and equitable future.
Financing this transition is paramount – and the potential for financial services, FinTech and professional service companies to create and deliver specialised products, services and approaches that materially help to address environmental, social and governance issues is huge. These businesses need to be on the front foot if they are to become brands that are genuinely aligned with sustainability, equity, and climate action.
Talking about this right requires a nuanced and specialised approach. For example, when promoting sustainability-linked loans and green bonds it’s no longer good enough to talk about duration, tenure and syndication. Of equal important is the green projects they finance, or the sustainability pathway methodology that actually makes a financial instrument sustainable. Journalists covering sustainable finance, ESG investing and capital markets today now often need to know as much about climate science, as they do about interest rates. So your communications needs to change accordingly.
Regional nuances exist everywhere. In a world where only a very small amount of 401(k) plans have adopted ESG investment strategies, while in Europe institutional investors have long been embracing sustainable investing, a regional approach to all communications and brand building is critical.
Regulation and government policy surrounding sustainable finance and ESG investing is being quickly established. The EU is already starting to implement its Taxonomy on sustainable finance, while the SEC is also closely scrutinising the branding and naming of ESG funds. The Asia Development Bank is looking to facilitate the closure of coal-fired power plants within 15 years across the region. Developments of this nature will impact business strategy as well as communications and marketing for years to come.
In this market, action, not just talk, matters. Stakeholders ranging from investors, corporate buyers, analysts and the media are increasingly supportive of sustainable finance and investing, but also increasingly selective and skeptical. Every day companies speak about the importance of protecting the credibility and viability of sustainable finance and investing. Authority, authenticity and application are critical.
Contact the Cognito Sustainability Practice and work with us to help you communicate about sustainability more effectively.