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Does ESG Reporting Strengthen Brand Perception?

Sharing your social good results through ESG reporting outperforms reviews, advertisements, and personal interactions, which are believed to be the only factors that influence brand perception.

A red and white logo, refreshing taste, and a wide range of flavours aren’t the only initial thoughts that come to mind when one thinks of Coca-Cola.

The consumers who buy the beverage, the investors who lend financial support, and the employees who work for Coca-Cola perceive the brand based on more than its functionality and design. 

  • How many volunteer hours is Coca-Cola dedicating to support their community? 
  • What % of carbon emissions are being reduced to help create a cleaner environment?

These measurements make up Coca-Cola’s Environmental Social Governance (ESG) practices, which directly influence the beliefs a stakeholder has of Coca-Cola.  

Quality testing has been done, market research has been conducted, and your brand identity has been mastered. Yet, what must not be overlooked is making a difference in your community and articulating how much of a change you have made. 

When brands are committed to not only making a difference in the world but are willing to share their progress and results through ESG reporting—stakeholders will perceive your brand as a social change leader. In turn, this leads to increased consumer spending, employee retention, and stakeholder investment. 

Let’s further explore the relationship between ESG reporting and brand perception.

What Is ESG Reporting?

Environmental Social Governance (ESG) reporting measures a company’s commitment to its Corporate Social Responsibility (CSR) initiatives. CSR initiatives are actions designed to address social, economic, and environmental issues such as:

  • Improving community involvement.
  • Reducing environmental footprint.
  • Promoting workplace diversity and inclusion.

While brands often highlight their progress toward these goals on their websites, social media, and press releases, simple verbiage isn’t enough. Stakeholders want an exact measure of how a brand’s social good efforts stack up. 

With ESG reporting, brands can track and share those results in a quantitative manner. This process allows a deeper level of transparency into each company’s operations, demonstrating how well they have adhered to the CSR initiatives they initially set out to accomplish. 

ESG reports present data that describe the outcomes and effects of specific CSR initiatives. For example, while a company may mention on its website that it’s actively working to reduce its environmental footprint, an ESG report will use an exact percentage to show exactly how much those rates have been reduced to date. 

What Is Brand Perception?

Brand perception refers to a customer’s feelings and thoughts towards a brand. The majority of shopping habits, investor-led decisions, and even the number of job applicants are all dependent on how they perceive a brand. 

Once someone adopts strong feelings or thoughts towards a brand, they will become more loyal to it: choosing it over competitors to purchase from, invest in, or apply to. 

When asked “Patagonia vs Canada Goose,” it isn’t solely about the price, material, and logo that make up why stakeholders will often choose Patagonia. It is because 64,000 Patagonia workers are supported by Patagonia’s participation in the Fair Trade Program and 94% of their line uses recycled materials—both ESG reporting metrics that contribute to a favorable brand perception. 

How Does ESG Reporting Influence Brand Perception?

ESG reporting makes your brand unique

70% of consumers want to know what the brands they support are actively doing to address CSR issues. At the same time, 46% of consumers look into a company’s social responsibility efforts before buying a new product.

In response to this growing interest, many brands are proclaiming their commitments to CSR and broadly explaining how they plan to reach those goals. For most stakeholders, these base claims aren’t enough. Instead, most are ready for brands to take their social good involvement a step further through ESG reporting.

You can set your brand apart from the competition by putting timely, actionable data behind your CSR claims. This reassures all interested parties that you’re not just talking about CSR —you’re actively pursuing it.

It isn’t every day we see brands sharing on their website or social media channels the difference they are making and the progress they have made so far. When viewing Patagonia’s website, it isn’t until its Environmental and Social Footprint page that the brand is viewed as unique.

Of course, most retailers have an interactive e-commerce website for their consumers and an updated career page for job applicants. However, Patagonia is unique because it incorporates specific and actionable data that reveals its progress toward environmental and social initiatives—something that is sure to resonate with stakeholders in the long run.

Kambeo Hub’s interactive story feature. Where businesses can share compelling visuals, narratives, and metrics to engage their followers.

ESG reporting makes your brand memorable

Thanks to the Internet of Things (IoT), we’re more connected than ever before. On a daily basis, consumers are inundated with brands telling their stories and sharing updates through social media posts and ads. 

While this information is interesting, it isn’t always memorable. When is the last time you remembered the script someone read on Facebook Live? What about the exact language a company used in an Instagram post?

It can be difficult to retain long-form information, especially when we see so much daily. However, it’s easier to remember numbers and statistics because they catch our attention and pique our interest. 

For example, which is more memorable in the case of Disney:

  1. A statement: “Help change the course of our planet’s story, creating a healthier home for people and wildlife.”
  2. A statistic: For the past 15 years, Disney has invested $24 million in energy-efficient products.

Option B is more memorable because it can be quickly digested and understood—with an easier chance of it being recollected later. 

ESG reporting holds your brand accountable

At its core, ESG reporting is rooted in accountability. By compiling these numbers and sharing them openly, you hold your brand responsible for delivering on the high standards you and your stakeholders have set.

When a company fails to deliver on those expectations, there’s a direct risk to its brand perception. One report found that 57% of consumers are willing to stop buying a product if they discover the brand is not committed to sustainability. 

How can you show your commitment to sustainability? Through ESG reporting.

These reports don’t have to be 100 pages long (because individuals will get lost trying to parse and fact-check a report of that size). The basic requirements lie in:

  1. Focusing on 4-5 key metrics.
  2. Communicating growth (i.e., “We reduced plastic by 17% in 2021 by focusing on sustainable packaging”).
  3. Use visuals to convey statistics, such as a metrics dashboard or infographic.

Stakeholders are growing similarly wary of organizations that only say they’re going to take a certain action but never actually follow through with those goals. Stakeholders are prioritizing CSR efforts and, most importantly, holding companies to a high standard of transparency and accountability through ESG reporting. 

ESG reporting makes your brand meaningful

While you’re already used to showcasing your key differentiators, buyers want to see more than a unique product or service. Slick marketing campaigns can help you attract interest from your stakeholders, but unless there’s a layer of substance underneath, the attention will wane. 

That layer of substance stems from a company that cares about more significant issues, such as climate change, diversity, and community relations. Caring about an initiative involves two steps: deciding to take action to improve these concerns and then following through with ESG reporting to showcase your progress. 

Focusing on ESG data, such as sharing the # of volunteer hours your company has contributed in the last year, for example, provides greater insight into the issue of community relations than a generic Facebook ad would.

If an investor is deciding whether to pursue you or if an employee is deciding whether to work for you, your ESG reports provide meaningful insights and are relevant. For instance, an employee might have a passion for donating to charity. If they see that you have donated X amount in the past year, this creates an instant and powerful connection (one that can turn their ‘maybe apply’ into ‘apply’).

Don’t forget that reporting is defined as a way to present information. Therefore, ESG reporting doesn’t have to be directly linked to formal reports that take substantial time and effort to be developed.

When focused on communicating key metrics, analyzing growth, and incorporating visuals, your ESG reports will be far from mundane. Your organization will be perceived as memorable, accountable, unique, and meaningful—all of which contribute to building a positive brand perception in the minds of individuals who matter.

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