For Earth Day 2023, vague climate pledges remain a reputational liability

Quantifying the reputational risks and rewards of sustainability messaging.
4.21.23 / 4 min read

Happy (almost) Earth Day! Hats off to the tireless communications teams who’ve once again conquered the yearly “We have to get this out before Earth Day!” race.

But is this a race worth running? With a deluge of sustainability announcements, initiatives, and promises flooding in this time of year, do they genuinely make a difference or might they inadvertently tarnish a company’s reputation?

To better understand the true impact of corporate sustainability messaging, Signal AI dove into the numbers. The insights gleaned provide brands a valuable resource for charting their course for next year’s Earth Day announcement — or opting out of the race entirely.

Corporate responsibility is more scrutinized than ever, and sustainability is a top conversation driver

Today, a strong corporate purpose isn’t a nice-to-have – it’s a necessity. Of course, publicly stating and living your purpose isn’t without reputational risk. As Bill Bernbach, founder of the advertising agency DDB, said, “A principle isn’t a principle until it costs you something.” But as businesses are increasingly expected to take a stance on social issues, shying away from a strong sense of purpose can be equally risky, particularly in the realm of sustainability.

There’s no denying the role that corporations play in the climate crisis, making sustainability a critical topic of conversation. But while climate remains top of mind for many, it’s not the only area of sustainability that garners attention. The chatter that elicits the most positivity has less to do with pledges and more to do with how businesses rethink their entire value chain. 

Sustainable Manufacturing is one of the most prominent themes in this regard, suggesting that brands should be unafraid to get specific and tangible with their messaging. Audiences want to know precisely what actions companies are taking to make their operations more sustainable, whether that involves saving energy, investing in circular systems, or taking steps to preserve biodiversity.

Making a climate pledge can lead to criticism  

Committing to climate action isn’t always a surefire ticket to public adoration. Banks, for example, often find themselves in the crosshairs for pledging to combat climate change while simultaneously investing in fossil fuel projects. But because banks may have a fiduciary duty to make those investments, striking the right messaging can be a delicate balance. 

Of course, that doesn’t mean financial institutions should avoid climate commitments for fear of being called hypocrites. It’s difficult to hit a perfect score, and even some of the best performers will make missteps. Brands should strive to recognize the areas where they can make a positive impact, and where the journey will be harder.

When a brand is being too opportunistic, it shows

Looking at the data around ESG, a clear pattern emerges: conversations around ESG goals increase around earnings calls and peak at COP, the United Nations’ annual climate change conference. To be fair, that’s not a surprise, as those topics are expected to be addressed. But the regular drops afterwards seem to validate the perception that much of this is corporate window dressing. 

This pattern underscores the potential for companies to differentiate themselves by maintaining a focus on sustainability beyond these high-profile moments. For organizations seeking to truly integrate ESG values into their brand narratives, it’s crucial to demonstrate a commitment to these principles not only when it’s convenient, but throughout the entire year.

To meet your goals, measure them

It can be hard to track who is actually walking the walk, especially if companies are only using their own internal metrics to track sustainability initiatives. For real impact to happen, it must be measured transparently.

That’s why the conversation about standardizing and openly reporting sustainability data is ramping up, a sign that things are starting to shift. Investment firms are in a strong position to influence this change and ensure that sustainability goals are tracked and met. 

Admittedly, this mission isn’t a walk in the park, and the path can become particularly challenging amid economic turbulence where financial performance takes center stage. However, these trying times present a golden opportunity to adopt a “never let a crisis go to waste” mentality, moving beyond hollow assurances and championing transparent sustainability initiatives while driving the bottom line.

Focus on making the most impact

When it comes to brand impact, sometimes less is more. By honing in on a narrower focus, brands can maximize their impact. Case in point: Google, currently ranking second (tied with SAP) among its competitors for sustainability, has found a winning strategy in prioritizing decarbonization.

This focus is intimately woven into Google’s business model. With the company’s services necessitating colossal amounts of energy, transitioning to carbon-free sources offers an opportunity for substantial environmental impact and differentiation from rivals. The key lies not in obscuring the issue at the heart of one’s business but in acknowledging and addressing it head-on.

Google’s narrative encompasses tangible action and quantifiable results that are continuously pursued throughout the year—precisely the blueprint that Signal AI’s insights suggest for a successful approach.

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