Through strategic corporate communication, stakeholders are informed and aware of a company’s reputation promise.
It ensures that companies communicate in alignment with their reputation promise to earn the trust and support of stakeholders in the long term.
Strategic corporate communication is described as an expressive form of communication that seeks to establish, represent, and express a company’s identity.
Through strategic corporate communication, stakeholders are informed and aware of a company’s reputation promise. Therefore, strategic corporate communication ensures that organisations present and express themselves in a manner consistent with their reputation promise.
It ensures that organisations are trustworthy and earn the trust of stakeholders. Strategic corporate communication plays a significant role in managing a company’s corporate reputation and identity in a sustainability context.
It ensures that companies communicate in alignment with their reputation promise to earn the trust and support of stakeholders in the long term. It is a communication approach that is not short-term driven but focused on the long-term existence of an entity.
A company’s corporate identity rests on how aligned the company's promise, behaviour and image are, as noted by Dr Adri Van der Merwe of the University of Pretoria. These three elements of corporate identity would play an important role in a company’s ESG strategy formulation and reporting.
ESG are the set of environmental, social and governance standards used by stakeholders in evaluating a company's operation to assess its ability to create value sustainably.
It encompasses the risks and opportunities posed to businesses by climate change, resource scarcity, diversity and inclusion, data security, tax transparency, labour practices, social frameworks and more.
In recent years, it has become a hot topic, with investors scrutinizing the ESG strategies of companies.
The PwC 2021 Annual Corporate Directors Survey points to the momentum ESG is gaining in the boardroom, with half of all board meetings having ESG as an agenda item.
The UN climate change conference, COP 26 held last year in Glasgow and the race to NetZero will also require companies to consider the impact of global and national targets set to reduce emissions.
These climate goals will require companies to adopt and invest in new business models and technology to embrace the changing landscape. It also requires businesses to balance the need to reward shareholders in the short term while ensuring that adequate investments are made today for the future.
Having set an ESG strategy with metrics to monitor progress on strategic pillars, companies need to tell an authentic and coherent story. ESG reporting should be viewed as a strategic corporate communication tool that expresses the company's identity and builds trust with stakeholders.
Investors are eager to understand the long-term impact of their investments and a well-communicated ESG strategy will help achieve this goal.
Having a good understanding of the various ESG standards is an important step for reporting. There are various ESG standards, such as the SASB (Sustainability Accounting Standards Board) and the TCFD (Task Force on Climate-Related Financial Disclosures).
Once understood, companies can leverage the various ESG standards to provide a compelling story that enhances their reputation. The metrics and KPIs reported on also have to be carefully selected to ensure they are aligned to the delivery of long-term value creation by the company so stakeholders can trust them.
The role of data and the use of technology cannot be over-emphasized when it comes to ESG reporting. Data enables companies to gain insights into their business, markets, products, customer engagement and more.
These insights result in a more efficient allocation of capital, influences the sort of information provided to stakeholders and the measurement of KPIs. In addition, employing technology improves efficiency and provides flexibility with the presentation of data.
Through ESG reporting, companies can report on their promise, behaviour and image to enhance their reputation with stakeholders.
Awodumila is an associate director at PwC Kenya. He writes and speaks widely on corporate reporting topics
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