Some of the most common proof points ESG consultants use centre on consumer and talent impact. Numbers that clearly demonstrate the purchase value of environmentally-conscious products, or the benefits an ethical supply chain has on retention.
If that sounds like a broken record, that's because it is. Major players have long been advocating for purpose-driven strategies, and reinforcing their arguments with ESG's power on a brand's reputation internally and externally. On a brand's revenue and growth potential. And fundamentally, a brand's ability to survive and thrive in economic uncertainties.
Overall, great news for businesses and consumers. And for the regulatory bodies implementing legislation. But, it's also resulted in a surprising side effect, and a new threat to brands' reputations.
Here's why purpose-washing isn't just doublespeak, and how it could be the emerging challenge to watch out for in your business' PR.
Purpose is one of the top drivers for today's talent, often overriding the likes of salary, benefits and title. Gen Z is the first generation to prioritise purpose over salary, according to a WeSpire study. In 2016, over 64% of Millennials said they wouldn't even consider a job where the employer didn't have a strong CSR strategy; 83% said they'd be more loyal to a company that positively contributed to ESG issues.
For consumers: a McKinsey study that examined 5 years' worth of data found that products making ESG-related claims accounted for 56% of all growth. In a 2020 study, McKinsey found that ~60% of consumers said they're willing to pay more for a product with sustainable packaging.
These findings are only a drop in the ocean - but the takeaways? That talent is shifting priorities and consumers are putting their money where their mouth is. Great for brands' revenue, great for scaling businesses.
Right now, competition is high. Leaders are looking to all corners of their business models to differentiate in the market, and value- and moral-driven decision-making has significant levels of commercial power. Naturally, branding that encapsulates individuals' search for purpose is going to lead.
But it also raises the stakes. And expectations on brands to be and do all have never been higher.
Using social or environmental action within your PR strategy is by no means wrong. On the contrary, it can drive real impact, set the bar for other businesses, and increase investment into ESG and other functions.
But, promoting action can also result in misleading your target audience and stakeholders, and cause inauthentic brand experiences. And it's easier to do than you may think.
Terms like "ethical", "kind", and "sustainable" sound attractive in a pitch deck, but there's little regulation around making these claims (although that may change in the next decade). Making it difficult to substantiate what's led by action, and what's led by PR speak.
They can also be interpreted differently, and applied to broad situations. To take a commonly-used word, stamping a product "green" could mean recyclable or made from recycled materials; produced in an emissions-free supply chain, or having no lasting environmental impact; or practically anything else. Even claiming that you have a diverse workforce opens the question of what "diverse" means to the individual.
Because perception can differ so vastly, labelling a product, outcome, or an entire brand as being X, Y or Z increases risk. Modern consumers are savvy, and without specificity or evidence to back up your claims, you’re inadvertently putting a target on your reputation's back. And fallout is very difficult to recover from.
It's not just about messaging - purpose-washing also derives from brands trivialising serious social issues. In 2020, many organisations rushed to promote their support of the Black Lives Matter movement with messages or statements. This resulted in huge backlash, as many perceived those responses as vacuous, and devoid of meaningful action.
Purpose-washing might sound like an accusation reserved for ill-meaning brands. But in most cases, it's almost certainly a result of simply missing the mark. Even for the most value-led businesses.
For leaders, it's easy to feel like your brand needs to be vocal in every social issue or current event. That's a misnomer. In reality, the majority of consumers and talent will expect brands to be proactive in core issues like environmentalism and DEI matters, but demonstrate empathy on a broader basis.
It will ultimately depend on your business type, mission, and audience. Regardless, it's critical there's clarity on why and how.
If your brand is going to publicly comment or take a stand on an issue, it needs to make sense; International Day of Education won't necessarily be applicable to a homeware brand. Posting statistics on social media will feel inauthentic.
Not only that, messages should be driven by action. Your audience needs a clear connection between your brand, your words, and your deeds.
Promoting everything you're achieving is one way to boost PR impact, but there is also a rising scepticism in businesses which only highlight the good; audiences are often left wondering if you're trying to conceal or distract from a larger issue.
Whatever your view, there is a need to communicate the other side of the coin. If your organisation set a target to achieve ethnic diversity at Board level by 2025 and isn't on track, communicating the reason you won't reach that goal, and subsequent actions is key. This demonstrates a clear intention backed by strategic action. Same goes for practically any matter.
Fundamentally, avoiding accusations of 'purpose-washing' is about clarity on your brand values. A unified understanding of those values internally (especially at a senior level), and viable means to bring them to life is the ideal launch pad for any PR strategy. If there is misalignment on what your brand stands for, or the Board isn't bought-in, you'll continue to struggle.
Recruiting a seasoned PR professional early on in your purpose-driven strategies is central. Whether it's on an ongoing basis or one-off contract, a great PR consultant will help you identify the risks before they lead to a reputational crisis. And drive the right messaging for launch success.
That's where we come in. We have access to a network of hundreds of PR professionals with experience in ESG, DEI, reputational management and more.