Around the world we are seeing increasing environmental concerns by consumers, and the continuing rise of socially-conscious stakeholders. China is no different, and ESG (Environment, Social and Governance) is playing an ever more important role in a business’s strategy development, and therefore within their marketing strategies too. It is more and more important to keep audiences informed on the actions and corresponding outcomes associated with a business’s ESG objectives.
In this article, we explore the increasing importance of ESG in China, and how brands in market can integrate their ESG policies with their communications.
ESG represents a brand’s vision, core values and guides decision-making across a wide spectrum of business practices, from environmental responsibility, social issues, corporate responsibility and ethical management.
A variety of governmental organisations and financial institutions have devised ways to measure the extent to which a specific corporation is aligned with ESG goals. In less than 20 years, the ESG movement has grown from a corporate social responsibility initiative launched by the United Nations, to a global phenomenon representing more than USD30 trillion in assets under management. According to Bloomberg Intelligence, it is estimated that by 2025, the total scale of global ESG assets will reach USD53 trillion, accounting for one-third of the global assets under management.
Awareness for ESG is growing in China, with China planning to reach peak carbon use by 2030 and aiming to become carbon neutral by 2060. More and more companies in the market are committing to ESG data disclosure and monitoring, spurred by stricter regulatory requirements, growing investor interest, and the widespread belief that accounting for ESG contributes significantly to long-term business success. According to public statistics, 125 companies in the A-share market released ESG/CSR/sustainability reports in 2021. Chinese ESG data disclosure rates have improved significantly in the past decade in view of growing policy support and investor demand.
Marketing and communication’s role is to showcase the actions taken by a company to make and meet ESG commitments, both internally and externally. Marketers often take lead on providing solid research and insights into what stakeholders, audiences and employees expect from the company, and how best to engage them in driving ESG forward as a community.
1. Create strong ESG content
In China, companies generally lack unified disclosure requirements and clarity on what information to provide to their shareholders, external rating agencies and data providers. Therefore, having a company policy for how to communicate, and what content should consist of, is crucial.
IWG, the world’s largest flexible workspace company, proactively published a white paper regarding its annual ESG endeavours, and in doing so, not only showcased their commitment , they enhanced their thought leadership in the area. In April 2022 in line with World Earth Day, IWG conducted research into FTSE 250 businesses to understand more about the people’s general working practices – the report revealed that many people globally are looking to reduce their carbon footprint by cutting their commute times, working from home more often, and choosing more sustainable transport methods. The research gained global traction and has sparked a discussion by both employees and employers about what sustainable steps they could be taking.
Developing branded content such as white papers, annual reports, or survey reports that are open, honest, backed by research and are credible with solid statistics, demonstrates proactive commitment to ESG in the China market and globally, and helps build a reliable and trustworthy brand reputation.
2. Become an active player in ESG communities
Multiple Chinese associations, media outlets and institutions are building up ESG communities and are offering relevant services to support businesses looking to learn and do more in the ESG space. It is important for Chinese brands to have visible presence within this space.
For instance, Chinese mainstream media platform Sina Finance built an ESG professional news and valuation centre in China – they launched a Chinese ESG monthly magazine (ESG Leaders) and began a Chinese ESG Forum / Annual Summit which has become a very influential platform in China. We recommend for brands in China to share what they’re doing in dedicated ESG publications, and by having presence at industry trade events and forums, in order to build awareness and credibility.
In addition, brands can help build the communities themselves, especially when operating within a more niche sector. For example, leading design platform, Design China Beijing, will launch its Sustainable Design China Summit (SDS) later this year. The summit aims to unite a community within the design industry to discuss sustainability and ESG with high-profile figures and industry insiders.
3. Effectively engage with audiences
Younger audiences who typically live on social media, especially millennials and Gen Z, tend to receive news and information on platforms such as WeChat, Weibo and RED. Sharing a brand’s ESG endeavours through engaging content on social platforms can have a strong impact.
Alipay (owned by Alibaba) is an example of a Chinese organisation that has taken audience engagement to the next level, and put their customers at the centre of their campaign. Alipay’s mobile payment platform is used by more than a billion people to pay for everything from groceries, to bike rentals, to wealth management products. In August 2016, the Chinese company turned the power of its digital technology towards promoting climate action. The Alipay Ant Forest project, launched within their mobile app, rewards its users with “green energy points” each time they take a step to reduce their emissions, such as by biking to work, going paperless and buying sustainable products. These points grow into a virtual tree on the user’s app, which Alipay matches by planting a real tree or protecting a conservation area, in partnership with local NGOs. Since its launch, Alipay Ant Forest has attracted over 500 million users, planted 100 million real trees in Northwest China, and protected a total area of 12,000 hectares of conservation land. The Alipay Ant Forest initiative issues an annual report sharing these results, allowing their audiences to see the direct impact they are making.
To really engage audiences in ESG initiatives, think about how they can be offered an active role to play. Whether that’s integrating sustainable initiatives into the product, or organising community events that better the planet – there’s plenty that can be done to make your audiences feel as though they’re part of the solution.
If you’d like to find out more about ESG in China, or discuss with us your integrated marketing and communications needs, feel free to get in touch.