Companies tend to overstate sustainability and ESG achievements

07 January 2021 3 min. read
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When it comes to sustainability, businesses in the Asia Pacific (APAC) region seem to have more bark than bite. According to a new Sandpiper Communications and PublicAffairsAsia report, nearly 75% overstate their green achievements.  

The survey involved more than 50 communications, investor relations and public affairs leaders at companies from various industries across APAC. The backdrop is an increasingly imperative sustainability and environmental, social and governance (ESG) agenda, and the report looks at how businesses are coping.

Few can deny the value of sustainability today. For one, climate change is now among the chief global risks hitting the business environment worldwide, giving ESG significant financial weight. To top this off, ESG reporting standards have reached a stage where compliance and excellence almost certainly translates to better financial performance.

The commercial value of a differentiated sustainability story

Driving these developments is a single factor – perception. For many, green practices have come to be associated with trust, forward thinking and other much-coveted values. The conscientious consumer of today is more likely to opt for sustainably sourced goods and services, and affiliate with environmentally conscious brands.

The same can be said for investors and media influencers – all of whom back the green horse in today’s world. Accelerating this trend, Covid-19 has sparked a number of unpredictable changes in consumer behaviour globally, one of which is a growing focus on environmentally friendly practices.

Against this backdrop, more than 90% of respondents to Sandpiper’s survey indicated that a strong and differentiated sustainability story can drive better commercial performance for any organisation. Much of it has to do with perception, and APAC businesses appear to have picked up on this.

Pressure to over promote ESG and sustainability achievements

Rosy communications

Rather than investing in more holistic and effective sustainability practices – which speak for themselves – businesses are opting to over communicate their existing practices, in a bid to construct a strong sustainability narrative. This is evident from the 75% of respondents who admit that there is internal pressure to over promote the sustainability achievements of their organisation.

For more than 10%, this pressure is significant, while another third acknowledges facing at least some pressure. Interestingly, 20% note that this pressure to oversell has increased recently, presumably in tandem with the Covid-19-induced green focus. Perhaps the biggest cause for concern is that few are using their actions to speak over their words.

In fact, only 10% noted that the pressure to over communicate has dipped recently due to an overall improvement in ESG performance, which negates the need to develop a narrative. The good news is that while over communication is rife, ESG is still a core consideration for most businesses.

Performance in ESG areas

A notable majority do just enough to meet stakeholder expectations, while roughly 20% to 25% make the extra effort to exceed them. Promisingly, a similar figure report that ESG factors are core to their business proposition, while only around 4% are falling short of stakeholder expectations. According to CEO at Sandpiper Emma Smith, the ESG momentum is there, which should be used to evolve to higher standards.

“With Covid-19 increasing the focus on the sustainability and ESG performance of public and private entitites globally, it is an opportunity for positive change. Our research shows more needs to be done to ensure that progress made in this area is meaningful, transparent and goes beyond green-washing.”