Telling your sustainability story communicates value to investors

Investors want companies to talk about sustainability as a business advantage, but most don’t

Investors increasingly see sustainability as an opportunity and a business advantage, but most of them also say companies don’t successfully communicate about it.

Specifically, companies are not showing how “sustainability initiatives are linked to their strategy, financial performance and value in meaningful ways,” according to research by Principles for Responsible Investment (PRI), a UK-based initiative that works under the aegis of the United Nations Global Compact. Investor Study: Insights from PRI Signatories, co-written with Accenture, finds that a majority of CEOs (57 percent) say they are able to articulate their sustainability strategy. However, only 9 percent of investors say that CEOs can do this. And while 38 percent of CEOs say they communicate the business value of their efforts, only 7 percent of investors agree.

The gap between talking sustainability and talking value

These findings reveal “a striking gap which exposes the shortcomings of many companies in communicating their approach to sustainability and its links to the traditional measures of business value and success,” according to the report.

The PRI report makes a number of recommendations for addressing this challenge, though curiously, only one — “focus on opportunity and value,” rather than risk and mitigation — is fundamentally about communications. The others are suggestions for systemic changes largely beyond the scope of an individual company: commit to the long term, develop the knowledge base of investment advisors, develop common metrics across industry sectors and collaborate with policy makers to reshape markets and systems.

These actions are worthy efforts, but they overlook something every company can do that would vastly shrink the communications gap: create strong brand stories for sustainability.

Opportunity: the sustainability brand story

This is a significant overlooked opportunity. Few companies are telling sustainability brand stories, but they should be. A sustainability story can deliver a range of benefits, from improving investor communications to gaining customer buy-in to motivating internal teams. It can:

• Clearly convey your value and values in ways that resonate with all audiences
• Articulate your sustainability mission so employees throughout the business align around it
• Support increased investment in sustainability program funding
• Integrate your sustainability story with your brand story and overall business objectives
• Enable you to realize the brand value of your sustainability investment
• Serve as a lodestar for evaluating potential actions

To be sure, investors want hard business facts. It would be simplistic to say that a brand sustainability story alone will give investors the information they seek — there needs to be a “there” there. But stories bring facts to life and make them memorable. They resonate in ways hard numbers don’t; a story connects the dots to the wider world as well as to the company’s own vision and goals.

Fully communicating value and benefits requires engaging the heart as well as the mind. Giving sustainability a narrative that places a company’s efforts in context, highlights the people involved (both those who are acting and those who benefit), illustrates qualitative as well as quantitative value, chronicles the journey and maps that journey to goals will help a company provide the information that investors — and customers — need to spend their money wisely.

Stories bring facts to life and make them memorable. They resonate in ways hard numbers don’t.