Good Works: Kate Nettleton on Environmental, Social, and Corporate Governance

“We are on a highway to climate hell with our foot on the accelerator”, proclaimed António Guterres, the UN secretary general at COP27 last November. It's no wonder; with Amazon rainforest deforestation at a six year high, and new coal mines back on the agenda here in the UK, the headlines speak for themselves. 

And it’s not just climate change that we’re ‘fighting with our lives’ to use António words, our performance on other more ‘people’ focussed issues sees us falling short too; the war in Ukraine is causing untold hardship, nearly half of companies outside the FTSE 350 have boards that are three-quarters white and in the UK, there are almost four million kids living in poverty. 

With these alarm bells ringing, businesses need to accelerate progress towards their ESG goals, targets and initiatives. Fortunately, there‘s a growing recognition that People and Planet are equal and necessary brethren to profits. 

While demand may be 'off the scale' for ESG communications, the trust and authenticity antennae of consumers and campaign groups are more sensitive than ever. With the ASA now quick on the trigger to call out greenwashing, it's even more crucial we ensure communications don’t fall short. Unfortunately they have been. 

53% of consumers can’t name a brand that performs well on sustainability or diversity and inclusion. 

In trying to communicate our clients ESG goals, we have been as wasteful as the waste we’re trying to prevent. In trying to tell everyone everything, we’ve created a sea of green, a deluge of diversity. 

That’s what a new segmentation study by VCCP and Watermelon research has revealed. A first of its kind, the study of over 1000 people in the UK sought to understand the gap between consumers' beliefs and behaviours, bringing together their outlook not just on the planet but people too. 

Yet there’s an opportunity ahead of us. A tipping point for the industry.  

We need to tip into a new era, one where our starting point isn’t the very similar internal sets of targets, goals and ambitions - but consumers, because without them we can’t effect change. 

Without them buying into more responsible brands, those responsible brands won’t survive because their profits will decrease and they won’t have the money to fund the change needed to behave more responsibly. 

The reality is though, their belief  isn’t translating into behaviour.

In fact for over 80% of people, believing in ESG issues bears no relationship to actually behaving differently. And just 17% of people have looked up a brand’s sustainability or D&I credentials. 

To derive value from values, we need to decrease the gap between attitude & action. We can only do this if we really understand which consumers actually have a propensity to change, and which messages within ESG will actually attract them. 

That is easier said than done. We’ve been presuming that ESG communications will motivate everyone. When in fact there are really only three segments of the population who have the will or capacity to change their brand or buying decisions in response to responsible behaviours. 

But that’s ok, because recent scientific studies show you only need 25% critical mass of a population to create change and reverse a majority viewpoint. 

These ‘Principled’, ‘Pragmatist’ and ‘Popularity seeking’ segments are the only groups with the potential to really change their belief in brands and behaviour as a result. They’re the one’s worth talking to, if crucially, our clients have something worth talking about, but each needs a very different set of tactics.

The Segments 

Principled people are well informed on all the issues, yet they still require and are open to more education about how to buy and act responsibly. The knee-jerk would to be to rely on them as the flag bearers of change, however they tend to keep within quite closed community groups. They will create change, but they won’t act as a mouthpiece for it. 

Pragmatists are the type who may do a lot for the planet, but are less motivated by people issues, and only really make sustainable choices when it's something they’ve always done. They are set in their ways, and don’t like to be pressured into change, so require more straight talking, transparent tactics. 

Then there’s Popularity Seekers, strong advocates for many issues, especially diversity and inclusion, thanks in part to their diverse ethnic makeup. Yet they actually don’t act on these beliefs, unless it makes them look good. Brands can only activate this group if they can be made to feel like the responsible choice will give them notoriety or social credit. 

On the other side of the coin are ‘Passives’ and ‘Preoccupied’ segments, which make up about 48% of the population, who are either too apathetic or too concerned with simply putting food on their table to change their purchasing decisions as a result. 

You know that age old response, ‘what’s the point if everybody isn’t doing it’? That’s emblematic of a Passive. The segment who are most likely to feel they cannot make a difference, and that their personal behaviour has no impact. 

However, Passives might not be a completely lost cause. Whilst they may have a low potential to change their buying behaviours, they do have a strong desire to feel respected by their peers, so by influencing others around them we may be able to nudge them towards good. 

For the Preoccupied though, with the cost of living crisis worsening and more energy price hikes on the horizon, this amorphous segment is likely to grow, leading to more people who are too concerned about counting pennies to start counting carbon. 

The difference between these segments is stark and will be constantly evolving. We need to keep an eye on how they ebb and evolve. In turn, clients have an opportunity to see how these segments map against their customer base, and create more effective ESG focused communications that are born of a more nuanced, and targeted approach. 

With a sharper understanding of the real potential amongst customers, clients and agencies also can’t ignore their own internal responsibilities. As Greta would say, our house is on fire, and our houses need to be in order, and scrutinised,  to ensure good practice and avoid the need for the likes of ASA to act. At the VCCP Group, while we still have a long way to go, we’ve committed to  Net Zero by 2030 and have set ourselves goals verified by the Science Based Target Initiative to drive our progress. 

With the right understanding and realistic ambitions, we can move into a new era  that leaves behind the past obsession with broadcasting client’s internal purpose, or fracking for claims, to one committed to helping our clients communicate more purposefully, choicefully and effectively. 

Let’s aim more deliberately on motivating the right people, with the right messaging to turn belief into behaviour. Let’s all start appreciating this difference, to make a difference.