Disrupted differentiation

Against the backdrop of a second Donald Trump presidency, Badenoch’s remarks focused on the challenges businesses face as they define and communicate their ESG strategies. At the heart of the issue is the volatility of the external environment, not just politically, but societally and economically. Crucially, these drivers of disruption are heavily connected.

Social fragmentation is rapidly changing the beliefs and behaviours of consumers, driving them to be more activist and tribal in nature. Policymakers and regulators are under pressure to respond to this as they tread a fine line between implementing measures that support the needs of the electorate, unlock economic growth and contribute as responsible global citizens.
At the same time, businesses seek to drive growth, harness innovation and capitalise on the transition to a more sustainable and equitable future.

This dynamic creates a disrupted landscape that businesses must navigate effectively to protect and enhance their reputations.

The velocity of volatility

The consequence of disruption and the impact of digital technology on the way that audiences interact means the issues that place scrutiny on businesses’ ESG strategies can shift rapidly. The focus on the E, S and G can move quickly, and businesses need to understand that dynamic and combine robust preparedness with an agile approach that enables them to stay ahead of the curve.

As key stakeholder groups become more closely connected, data and analytics are a crucial weapon to understand how beliefs are being shaped and where influential conversations are taking place. This insight not only enables businesses to understand emerging risks and opportunities, but can help form the basis of a content and channel strategy that helps unite internal stakeholders from a range of functions.

Cross-functional storytelling

In a world of highly connected stakeholders, effective storytelling needs to bring together the insight and expertise of a variety of internal functions, from sustainability, compliance, investor relations, and communications. Bringing alignment to this is challenging and requires the fostering of a discipline-neutral culture and a common language that breaks down the siloes of specialist teams.

Those businesses that get it right will be able to combine both accessible and emotional storytelling with technical detail that works as effectively to communicate mission, vision, and values as it does to support compliance, reporting, and investor obligations.

Seizing the opportunity

And therein lies the opportunity. Whilst a disrupted landscape provides a significant challenge for businesses, it also enables them to differentiate themselves. From developing a simple and accessible narrative to aligning this with the values and issues of their key stakeholder groups, contributing to relevant debates, and demonstrating their technical competence and progress. These are all essential ingredients to helping businesses tell a bigger story that enhances and protects their reputation.

For more information on our financial service and sustainable finance practice, contact Nick Woods, Head of Financial Services and Ben Carr, Sustainable Finance Lead.