As Brands Look to Achieve More with Less, Discussions at the Bloomberg Media ESG House @ SXSW Offer Purpose-Led Business Insights

It goes without saying that businesses and their leaders are facing a challenging year. Economic uncertainty is looming, the rate of tech innovation and adaptation is exponentially accelerating, consumer expectations have never been higher — and all of this is happening at the same time that both scrutiny and demand around ESG efforts are increasing.

ESG has become a key driver of business performance. The Bloomberg Media #ChangeTheWorld Report shows that consumers and business leaders alike are aligned on the importance of leaning into ESG and sustainability-related communications; another study reported that four in five decision-makers say their company’s current ESG strategy has created a significant or transformational increase in revenue.

These macro trends impact both brand marketers and the broader C-suite. As the corporate agenda shifts, marketing’s impact on revenue is stronger than ever, yet in times of economic uncertainty, doing more with less is the mantra. At Bloomberg Media, we work with our partners daily to identify the best approaches — and at the Bloomberg Media ESG House @ SXSW this year, we led three days of meaningful conversations that focused on accelerating purposeful solutions at the intersection of technology, sustainability, creativity and inclusivity.

I’m excited to share three key takeaways from the event with you:

1. Brands that evaluate new tech innovations with an ESG lens can position themselves to get ahead in a credible and authentic way.

In the current environment, brands need to quickly evaluate what new innovations are critical for their business, and then adopt and message accordingly. Yet a factor analysis conducted on data from the Bloomberg Brand Accelerator, our proprietary brand perception study measuring 700+ brands, demonstrates that social factors and how a company communicates their governance practices actually lead in driving whether or not a brand is perceived as having purpose. That means brands need to focus on staying relevant and human as they incorporate technologies like generative AI into their marketing practice, internal systems, data handling, and other areas. It also means that they need to address potential social issues resulting from that technology.

One example: as futurist and founder of WAYE Sinead Bovell pointed out during our Bloomberg Technology: How Platforms are Enabling Inclusive Creativity panel, “the future is headed in a direction where people can create and control identities outside of their own ethnic groups. This doesn't inherently have to be a bad thing, but we shouldn't wholeheartedly accept people playing different roles without first questioning the ethics behind it.” Questions of identity and inclusion need to be part of how your brand is innovating internally and through messaging.

Leaders will also have to be mindful of the source of new technologies. In the same panel, PwC Head of Metaverse Technologies Jeremy Dalton noted that “if people who develop and code software either introduce their own biases or introduce data that has biases into that software, then all of a sudden the technology doesn't seem so neutral anymore.”

This is a complex environment to navigate, and requires considering an expansive set of factors — from innovation to the future workforce to human rights and community  — against the business’s strategy across its dimensions. Marketers that can align that strategy with purpose and audience interests will see the benefit.

2. Carving out a specific niche for your ESG initiatives closely tied to your value proposition drives positive brand interactions.

Marketing is responsible for driving critical material that people are turning to engage with ESG topics. Our data revealed that 1 in 3 business leaders look to advertising to learn about ESG. They want to be informed and are using brand resources to make decisions for their businesses. But the costs of getting it wrong are hard to bounce back from. 

Greenwashing and purpose-washing are concerns, with some brands now practicing “green hushing.” Bloomberg AiQ, our proprietary AI-driven audience and content platform, shows that Greenwashing accounts for nearly 2k articles each week; Britain's Competition and Markets Authority reviewed 500 consumers websites from global companies and found that 40% of green claims could be misleading to consumers. And if that’s not enough, there’s no universal regulation on ESG; the rules and penalties are evolving, and unique to regions, nations, and in some cases states.

However, there is a clear mandate and demand from consumers, customers, and investors that companies maintain and progress on their climate commitments. Leaders need to drive visibility to their brand’s positive impact across ESG, in addition to tying that back to brand and business goals. 

One way brands can meet the huge need and desire around ESG communications while avoiding pitfalls is to bring consumers along the journey from the start. GM’s “Everybody In” campaign is a notable example of this approach, taking an optimistic tone for the future and inviting audiences to take part in the brand’s path to electrification across the entire process, from a look inside the Ultium battery platform to the company’s plan to promote equitable climate action in partnership with Bloomberg Green.

At our Bloomberg Green panel on Accelerating Sustainable Transformation at SXSW, Steve Hornyak, Chief Commercial Officer of wholly-owned GM subsidiary BrightDrop, explained that this allows the company to encompass “a broad spectrum of products that meet the needs of everyone, not just the elite and not just those that can afford expensive vehicles, but bringing it to everybody, and then actually expanding beyond just passenger vehicles and looking at getting into the commercial space [where BrightDrop operates].” That’s allowing GM to be both authentic and transparent. And it can lead to new partnerships, such as GM teaming up with Netflix to give more real estate to EVs in TV shows and movies to accelerate mass adoption of electric vehicles.

We know there are few challenges with silver-bullet solutions. But with more widespread understanding around ESG themes, brands should prioritize a focus area at the intersection of brand expertise and audience needs to drive memorability and impact — and welcome stakeholders to weigh in and cheer you on. 

3. There’s an opportunity to lead the way in demystifying the “S” and “G” in ESG, across data, content and management.     

First, a look at where we are with ESG data. Within the E of ESG, there’s an increased level of sophistication around measurement frameworks. The GHG Emissions Protocols are accepted broadly, and the majority of S&P500 companies disclosing across Scopes 1, 2, and 3. This is resulting in much more standardized frameworks and tools like TCFD and SASB, and also driving innovation around technology to enable more accurate and seamless tracking.

But social performance indicators are more nascent, and there isn’t yet standardization of reporting. Even within the Bloomberg ESG Scores which comprehensively look at S&P500 disclosures across ESG, there are barely half as many fields tracked in the G or S. That’s a challenge — but it’s also a tremendous opportunity for marketers to be in a first-mover position by defining measurement strategies and making data central to their initiatives. 

Next, audience engagement on Bloomberg.com shows that social- and governance-related interests make up a complex and rich landscape. Articles focused on topics like age discrimination, gender gap, student loans, consumer protection, and financial inclusion are much more engaged with than the average Bloomberg article. So here, too, there is opportunity, with broad diversity in terms of areas of focus and niches that brands can own and audiences want to hear about. 

Finally, business leaders can also drive leadership around Social and Governance measures by embracing mentorship and sponsorship as primary goals within their organizations. In our “Women Leaders in Male-Dominated Industries” panel at SXSW, Samsung Electronics America SVP/CMO of Mobile Experience Janet Chison Lee described these two approaches this way: “With mentorship, you’re generous with your time and your empathy. Sponsorship is different: you are generous in that you're willing to burn your personal equity for somebody else's advancement.” Businesses that work to codify their approaches to ensuring employee success stand to gain significant rewards among top talent and beyond. 

As can be seen in these takeaways, there’s greater urgency for brands to take a stand on relevant issues and be a part of the cultural conversation than ever before. Clarifying your brand purpose and uncovering what you can authentically stand for beyond profit, and the most effective ways to articulate where you stand, are today’s currency for growth and success.