In 10 years, ESG Investing will just be called Investing
According to a 2020 CFA Institute survey, 90% of investment professionals expect their firm’s commitment to ESG research to increase (up from 72% 2 years ago). As ESG becomes more and more important, it’s equally important that marketers understand what ESG means to their organization and their customers, how to position their organization efforts, and how to effectively utilize storytelling to share those efforts.
Marian Daniells, Vice President at Vested Integrated Communications hosted three experts in the ESG field to talk about how they define ESG today, challenges in talking about their organizations’ ESG efforts authentically, and the next evolution of ESG. The panel included:
- Ashley Ramsay, Director of Member Services at CFA Society, UK
- Blaine Townsend, EVP, Director Sustainable, Responsible and Impact Investing for Bailard
- Samuel Wang, Global Head of Corporate Communications & Interim Chief Marketing Officer at MSCI
Below we share a few of the high points and key take-aways from the conversation:
- How each organization defines ESG to their internal vs their external stakeholders is likely different based on the asset class, client segment, etc – but the key is to be specific and transparent in how you are defining it, and what your organization’s processes are.
- Ashley with CFA UK shared that their organization had to think about what ESG meant to different audiences as they rolled out their Certificate in ESG Investing (now available globally). They created communication plans and goals for influencers, employees, and individuals, tailoring a program that appealed to each and got a lot of great feedback by piloting their efforts with trusted partners.
- When getting started with your organization’s ESG efforts, it’s helpful to have an ESG champion – someone who is passionate or a true believer in the importance of ESG. “If you’re an ESG evangelist and you really believe in it, you’ll have an easier time communicating it. The right spokesperson really makes the job easy,” Blaine Townsend from Bailard said.
- When communicating your organization’s ESG efforts (especially if they are newer to your organization), it’s best to do so after your team has understood, internalized ESG efforts into their own processes, and really understand how it impacts a portfolio. This ensures the team is all on the same page and will create more consistent, authentic messaging.
- In some emerging markets and globally, certain ESG efforts can be lightning rods and won’t always get positive feedback – “not every article will be positive, but as long as we know that we have a goal – that ESG investing will be known as investing – we have to stick to it for the long run,” said Samuel Wang of MSCI.
- Taking a nimble, “test and adjust” strategy to communicating about your organization’s ESG efforts is helpful as it isn’t one size fits all – there are nuances such as geographic locations, to consider when developing messaging.
For our closing question, we asked each panelist what they thought the future of ESG looked like:
- Ashley Ramsay said: ESG is a part of sustainable investment – we want to encourage investment organizations to be proactive and help the world’s economy flourish but dong it responsibly. Innovation in Fintech will be something to watch – there will be greater accessibility to data, which means organizations can develop products and market them in ways they’ve never done before, and exercise influence in the market in that regard. Climate is a huge piece that we’ll be looking at across the board, and we’ll see that transparency and reporting will also become hugely important.
- Blaine Townsend said: In the short term there is a lot of scrutiny because the growth [of ESG investing] has been so rapid in recent years. Mid-term we’ll start to see current events (ex: social and racial awareness) get folded in to ESG framework and people will want to know “where are you going” and “what do you care about”? In the long term we may see climate issues come out from under the ESG umbrella and stand on their own, and it will be a question of what is/isn’t in your strategy and part of your business.
- Samuel Wang said: It’s a very entrepreneurial time – different types of assets definitely interact with ESG differently. And the pandemic as unveiled key social issues that will become more prevalent in ESG discussions. We’re all trying to move towards a standard, but we’re doing it in public so we get questions every day as we try to get it right. Over time, things will probably start setting down, but having all of this play out in front of everyone’s eyes is a big marketing and communications challenge.
ESG resources from our Panelists:
- MSCI’s ESG Research page
- CFA UK’s Research and Position Papers
- Bailard’s report: From SRI to ESG: The Origins of Socially Responsible and Sustainable Investing.
ESG Reporting & Advice from Panelists:
- Look at sustainability reporting – it’s not hard to see what’s real and what is just “smoke and mirrors”
- Note that some industries are under more pressure than others, so you may see differences in how things are reported and that’s okay.
- There is a movement towards data and fact-based reporting, we’ll be seeing more of that as time goes on.
- Reporting Resources: