How Sustainability Communications Attract Investors

How Sustainability Communications Attract Investors

Sustainability implies efficient use of natural resources, being mindful and responsible for the impact of business activity on the environment. Its common practices include transition to green energy, reusing and recycling of goods, as well as minimisation of their overall consumption. 

The growing destructful impact on the environment caused by industrialization leads to increasing eco-consciousness in the society. People are more eager to invest their money, time, talent and/or other resources into eco-friendly initiatives. No wonder, nowadays sustainability is becoming a widely used business strategy.

93 per cent of the world’s 250 largest companies (in terms of revenue) are now reporting on sustainability, as are three quarters of the top 100 companies in 49 countries.

Source: UN Sustainable Development Goals Report 

Organizations tend to map their sustainability goals according to stakeholders’ expectations to obtain more benefits. After all, such an approach allows for costs saving or income increase, and facilitates the business’ bottom-line growth. Showcasing how your company benefits through sustainability has an impact on the shareholder value.

Below, we have analyzed the nature of sustainability communications, identified the key reasons for communicating a sustainability strategy, and described the basic aspects of sustainability management software.

What are the sustainability communications?

Sustainability communication is a way of spreading awareness about the company’s sustainability strategy and their commitment and effort made towards achieving the related goals. It adds to building a trustworthy reputation, and gives an extra credit in the eyes of stakeholders. 

Sustainability communications play the key role in educating the current and potential clients and investors about the progress achieved through your implementation of sustainable solutions. While the clients prefer buying the products with the smallest ecological footprint, the investors are interested in seeing the financial profit of such activity.   

There are multiple ways to present the highlights of sustainability and environmental, social and governance (ESG) reports to different types of stakeholders. You may consider the following content:

  • For investors: booklets, infographics, presentations, press releases
  • For customers: videos and blog posts shared on social media  
  • For employees: workshops, corporate newsletters, etc. 

Thus, a detailed planning of a sustainability communications strategy is vital for active stakeholders engagement.

Regardless of the industry, sustainability comms serve as an efficient mechanism for letting all the mentioned types of stakeholders know that your organization is working on its sustainability commitments. It ensures building a reputation of a business that cares about the environment and is worth the investments. 

Sustainability communications vs ESG communications: what’s the difference?

Sustainability communications emphasize the contribution a business makes towards its eco-friendly and mindful impact on the environment and society. Such activity often includes the company’s own initiatives implemented on a local level, e.g. installing motion sensors for the lighting system, or utilizing alternative electric power sources like solar panels. 

One of their major regulative documents is Greenhouse Gas Protocol. The main target audience of sustainability communications strategy consists of customers and investors. It may include the employees as well.

A term ESG communications is often used in quite a similar context. Although their meanings somewhat overlap, these two expressions are not the same.

ESG communications include, but are not limited to sustainability aspects. For instance, even if a company produces zero harmful emissions and waste, uses only renewable energy sources, and does an excellent job from the sustainability point of view, but violates the rights of its employees - it is not compliant with ESG regulations. 

ESG reports and communications show how well the business complies to the existing governmental standards. Such information is primarily of investors’ interest, as they tend to assess possible economic impact and risks of different ESG factors. Considering that, with a good ESG communication profile, you will gain a chance to engage your potential investors effectively. 

All in all, to attract the investors and clients, as well as qualified employees, you should leverage both the sustainability and ESG communications, making them work as one.

Key reasons to communicate your sustainability strategy

You should remember that planning your sustainability communication strategy begins with a detailed analysis of the target audience. It involves all stakeholders like investors, clients, and even your personnel. So, you have to understand their motivation appropriately, which allows for creating respective structured messages and supporting your communication strategy.

Modern organizations are encouraged to achieve sustainable development goals. They should regard this as an outstanding opportunity because investing in business sustainability provides financial and material advantages. Besides, incorporating different sustainable initiatives into the company’s business strategy will enhance its operational efficiency. But at the same time, there is a need to consider the marketing viewpoint. 

Let’s name the 5 key reasons for communicating a sustainability strategy

  1. Potential investors prefer working with companies that ensure an easy transition to the green economy.
  2. Customers want to purchase sustainable, environmentally friendly products or use relevant services. 
  3. Showcasing sustainable initiatives helps to build a positive perception of your brand. 
  4. Employees remain loyal to companies that define sustainability as a strategic goal. 
  5. Sustainability communication contributes to improving the organization’s ESG Rating. In most cases, such a rating serves as an indicator representing sustainability performance.
Sustainability communications: stakeholders' motivation

What are the most effective ways to implement sustainability communications?

Today, the majority of companies perform ESG reporting using excel sheets. But frankly speaking, this approach to collecting and processing data is quite outdated, inconvenient, and unattractive. For instance, a much better way to communicate your ESG-related achievements is to publish regular reports. That allows demonstrating positive dynamics of change. 

It’s when sustainability management software can become an efficient assistant to provide constant corporate communications. 

Basics of sustainability management software

The appropriate sustainability management has already become a critical component of how businesses handle their carbon footprint and comply with ever-changing climate legislation. Its key practices include tracking scope emissions, collecting and analyzing valuable data (e.g. the amount of goods and energy consumption, waste and harmful emissions generation), and keeping stakeholders informed through timely, accurate and well-structured reporting. 

Generally speaking, the main task of sustainability management software is automation of these processes. Besides making them more effective, it enhances the sustainability communication, encouraging the companies to share the accurate information about their sustainable efforts with customers, investors, staff, and regulators.

In turn, that impacts the businesses’ revenue, valuation, and general brand perception significantly. Finally, high-quality sustainability software is an integral component of the company’s sustainability and decarbonization initiatives.

Custom software vs off-the-shelf solutions

No doubt, the sustainability management software market has been existing for many years. The most popular tools include SmartHead, Quentic, denxpert, WatchWire, and others. Such solutions differ in complexity, and need to be customized to match your business needs. 

While the simpler options provide only basic functionality which may be not enough to cover all required sustainability aspects and provide end-to-end insights, some offer an abundance of features. Although it’s tempting to share all the gathered data with the stakeholders, the information overload may be misleading for further analytics and decision making.

Increasing transparency can produce a flood of unsorted information and misinformation that provides little but confusion unless it can be sorted and assessed. It may add to uncertainty rather than to trust.

Source: Harvard Business Review

That’s why there is an increasing demand for managing information in a structured, clear and accurate way. Moreover, each industry has its own specifics, and, on top of that, each business has its unique processes and peculiarities. This creates space for custom sustainability management software development.

From the financial point of view, building a custom solution is certainly costly. However, if you consider it in the long run, the price won’t look that high when compared to the existing SaaS subscription costs for the years to come. You must be certain about the functionality your business requires for its best sustainability performance, and analyze which option will be more beneficial for you.

Features of sustainability software

The efficient sustainability management software features usually include: 

  • Environmental compliance and document management. Stay compliant with sustainability regulations and policies by receiving their latest updates automatically and timely. Keep all related documentation, including audits, environmental, health, and safety (EHS) reports, etc. in one place, so they are always at hand when needed.
  • Benchmarking. Define your business sustainability goals, e.g. the amounts of energy resources like electricity, heat, fossils to be used, etc. Comparing them to real-life consumption numbers provides valuable insights on your company’s sustainability performance.
  • Emissions monitoring. Keep an eye on the level of your corporate emissions, to make sure they are below the critical values set by Greenhouse Gas Protocol and other governmentally established standards.
  • Energy management. Track your energy consumption in real time, and leverage energy data analytics to gain valuable insights on cost-saving opportunities.
  • Reporting. Form explicit reports on your business’ sustainability KPIs and their compliance to your corporate goals and governmental standards over a selected period of time. 

How to build the most suitable sustainability software?

When you decide to build your own sustainability management platform, you have to consider the following critical points: 

  1. Define business requirements. Before starting the development process, you should clearly understand what your company aims to achieve by creating sustainability management software. Sustainability efforts automation may concern 
    1. ensuring compliance with all the environmental regulations 
    2. real-time monitoring of emissions and consumables
    3. enhancing environmental responsibility and spreading sustainability initiatives among your employees and clients, and much more. 

So, knowing your primary needs and budget allows you to define the features your tool will contain.

  1. Avoid complexity. As a rule, existing sustainability management software aims to “one size fits all” standard, trying to cover all possible use cases. Its resulting complexity leads to poor user experience, as stumbling upon the non-relevant functionality is time-consuming. Being well aware of your target audience’s needs, and realizing that less is more, you will gain a competitive advantage. 
  2. Utilize green-coding. The practice of writing software solutions to produce algorithms consuming minimal energy is called green-coding. Here, the code requires less energy to be spent on its physical server, leading to overall smaller energy consumption. That’s the principle of the battery-saving mobile apps operation. Note that the larger the user base of your sustainability management software is, the more significant are the energy savings. They can also be approximately calculated to estimate the positive effect of sustainable app development.

Let’s sum it up

A well-organized sustainability communication is one of the pillars supporting your positive brand identity and winning trust in the eyes of investors. However, creating explicit and clear messages about the progress your business makes towards achieving its sustainability goals requires profound data acquisition and analysis.

Sustainability management software does a great job in automation of these processes. When customized properly to your company’s needs, it is a powerful tool to get valuable insights on the business’ sustainability performance and the opportunities it offers.

As every company is unique, it’s no wonder that you may feel like you need some specialized software functionality to ideally match the business processes. We at Apiko will be glad to help you with the discovery phase for your project to ensure that what you intend to develop is really necessary. If the analysis of existing solutions proves so, we are ready and eager to assist with the software implementation.

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