From farming to pharmaceuticals, sustainability — and the closely related environment, social, and governance (ESG) framework — is an important topic across the industrial landscape, especially in the life science and specialty chemical markets. As companies work to set sustainability targets and advance toward those goals, ESG marketing, reporting and sustainability marketing can be both necessary and strategic for company growth.
Such communications are especially important for B2Bs, as potential supply chain partners and customers are increasingly demanding clear reporting on sustainability practices. This blog will discuss ESG reporting and ESG marketing for science-driven B2Bs.
What is ESG Reporting?
ESG reporting is the process of disclosing a company’s ESG performance to stakeholders, such as investors, partners, customers, current and prospective employees, and regulators. ESG reports, or sustainability reports, can take varied forms but are designed to provide a detailed overview of a company’s sustainability initiatives, including its goals, progress, and impact.
Sustainability reports and ESG reporting can include a range of metrics and information related to environmental, social, and governance issues, such as:
- Carbon emissions
- Water usage
- Waste generation
- Diversity, equity, and inclusion (DEI)
- Labor practices and safety
- Talent acquisition and management
- Learning and development
- Supply chain management
- Board diversity and composition
- Philanthropy and community involvement
- Executive compensation
- Anti-corruption policies
ESG Reporting Frameworks
The United Nations (UN) Sustainable Development Goals (SDGs) and other ESG frameworks provide a common language and a shared set of goals for companies to align their sustainability practices and reporting. Adopted by all UN member states in 2015, the 2030 Agenda for Sustainable Development contains 17 SDGs. They aim to end poverty, protect the planet, and ensure prosperity for all by 2030. Companies can use the SDGs to guide their sustainability strategies and reporting.
In addition to the SDGs, other ESG frameworks include:
- Global Reporting Initiative (GRI). The GRI provides a framework covering a range of sustainability issues, including governance, economic, environmental, and social performance.
- Sustainability Accounting Standards Board (SASB). The SASB provides a set of industry-specific standards for sustainability reporting.
- Task Force on Climate-related Financial Disclosures (TCFD). The TCFD provides recommendations for companies to disclose climate-related risks and opportunities in their financial reporting.
- Carbon Disclosure Project (CDP). The CDP provides a global platform for companies to disclose their environmental impact and performance. This framework covers a range of environmental issues, including climate change, water security, and deforestation.
The Importance of ESG Reporting for Science-Driven Companies
In addition to the growing demand for ESG disclosure among stakeholders, science-focused companies can see several benefits from investigating and reporting on ESG factors, including the following:
- Increased stakeholder engagement. ESG reporting can help companies connect with stakeholders by providing transparency and accountability. By communicating about their sustainability goals and practices, organizations can build trust with their community of stakeholders.
- Risk mitigation. The ESG reporting process can help companies identify and work to reduce potential ESG-related risks, such as environmental pollution, human rights violations, and supply chain vulnerabilities. By detecting these risks early, companies can take corrective actions to prevent negative impacts later.
- Improved financial performance. Sustainability is a smart business move in more ways than one. Research suggests that, over the long-term, ESG performance has a positive impact on a company’s bottom line. For example, ESG reporting can improve a company’s financial performance by attracting socially responsible investors who prioritize sustainability and responsibility in their investment decisions.
- Innovation. ESG reporting can drive innovation by encouraging companies to find more sustainable and responsible alternatives to their current operations. This can lead to the development of new products, services, and processes that benefit both the company and its stakeholders.
What is ESG Marketing?
Complementing the rise in ESG reporting, ESG marketing has grown as companies recognize that they need to highlight their commitment to sustainability and ethical practices to remain competitive. ESG marketing, also known as environmental sustainability marketing, is part of an overall sustainability communications strategy and consists of marketing activities that showcase a company’s ESG initiatives, goals, and achievements.
Depending on the company and its target audience, ESG marketing can take many forms. For example, a B2C company might focus on social media and influencer marketing to promote its sustainability initiatives to consumers. A B2B company, however, can use content marketing, industry conferences, and thought leadership content to reach potential business partners and investors. Advertising and public relations campaigns are also commonly used to communicate a company’s commitment to sustainability and social responsibility.
ESG Marketing Strategy for B2B Science Businesses
B2B science businesses face unique challenges when it comes to ESG and creating an ESG marketing strategy. These companies often operate in highly regulated industries and must prioritize compliance and safety. Therefore, they have to integrate sustainability initiatives while operating within regulatory, budgetary, and time constraints and maintaining excellent quality and safety standards. They also typically have complex supply chains and production processes, which can make it difficult to measure and report on their ESG performance.
However, because science-driven organizations, such as specialty chemical companies, may have a greater direct impact on the environment and the safety of employees and society than many other types of businesses, ESG marketing is especially important.
Here are some ways that B2B science businesses can approach ESG marketing:
- Highlight sustainability initiatives in content marketing materials. B2B science businesses can showcase sustainability initiatives and achievements in materials such as blogs, brochures, websites, social media, and sales presentations. Such efforts serve to educate consumers and investors about a company’s commitment to sustainability and ethical practices, and may help it stand out among competitors.
- Feature corporate social responsibility (CSR) initiatives in marketing materials. CSR initiatives are programs or activities that a company undertakes to support social or environmental causes. For example, a pharmaceutical company might sponsor a community health program or invest in renewable energy.
- Showcase corporate sustainability practices. Corporate sustainability describes a holistic approach to sustainability that goes beyond setting and achieving goals or complying with regulations and aims to address the root causes of sustainability challenges.
- Participate in industry conferences and events. Science-focused B2Bs can attend and present at industry conferences and events focused on sustainability and ESG issues. This can provide an opportunity to network with potential business partners and investors and showcase the company’s sustainability initiatives.
- Create sustainability-focused advertising and branding campaigns. Companies can use their advertising and branding campaigns to promote their commitment to ESG issues. For example, a mining company might develop advertising that highlights its commitment to reducing water use or its support for ethical labor practices.
- Publish sustainability-related thought leadership content. B2B science businesses can publish thought leadership content, such as white papers and blog posts, on ESG topics. This is one way to demonstrate expertise and establish the company as a leader in the industry.
In summary, ESG reporting and sustainability marketing are important for science companies as they strive to measure and promote how their operations and initiatives improve the environment and society. By incorporating environmental sustainability marketing into their business strategies, science B2Bs can improve stakeholder engagement, mitigate risks, improve financial performance, and promote innovation.
ESG Action Items
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