Why B2B Brands Should Embrace ESG: A Guide to Long-Term Success
In today’s business landscape, companies are being held to a higher standard of corporate responsibility. The concept of ESG (environmental, social, and governance) has gained traction in recent years, with more and more companies committing to initiatives that promote sustainability, diversity, ethics, and good governance. This trend is not limited to B2C companies. B2B companies, too, are being called upon to take a stand on ESG and to demonstrate their commitment to responsible business practices.
Joe Cohen, the Chief Marketing and Communications Officer at AXIS, discussed the importance of taking a stand as a B2B brand in a recent podcast episode of Renegade Marketers Unite. According to Joe: “B2B companies shouldn’t be afraid to take a stand. When it comes to taking a stand, specifically with ESG, it’s about understanding how the program aligns with your business priorities, how it relates to the various issues that are relevant to your business, and why you have a stake in the game.”
Read on to learn how you, too, can take a stand on ESG with our helpful guide below.
When to Take a Stand
B2B brands shouldn’t take a stand just for the sake of taking a stand. The choice needs to be aligned with the company’s business priorities. According to Joe: “Of course, an organization has values and beliefs. Our belief is that you also need to have a stake in the game for the topics where you choose to have a point of view.”
This belief drove each letter of AXIS’ ESG initiatives:
Environment
AXIS is a top global player in renewable energy with a significant chunk of work in the property insurance space, making it a no-brainer to dedicate its corporate citizenship program to growing renewable energy.
To do so, AXIS is phasing out the thermal coal business from its insurance, facultative reinsurance, and investment portfolios. Recently, the brand also made a public commitment to stop coverage of oil and gas exploration within the Arctic Wildlife refuge. There’s more, too. You can check out their full fossil fuel policy on their website.
Social
AXIS recognizes that a more diverse and inclusive workforce will equal a stronger company overall. Given the talent shortage in the insurance space, they also wanted to present themselves as a welcoming place for people of all backgrounds to pursue a career.
Thus, AXIS implemented a D&I Council, mandatory education programs, diverse interview pools, salary benchmarking, and employee resource groups (ERGs).
Governance
With a dedication to ensuring best practices across the org, it’s a no-brainer that AXIS would work closely with its Legal team to ensure its business practices are compliant with regulations.
AXIS constantly audits itself to make sure it has clear and transparent disclosure agreements, that its internal ethical practices are sound, and that its workforce is kept educated and up-to-date.
The Benefits of Taking a Stand as a B2B Brand
Taking a stand has numerous benefits for B2B companies. Here are a few of them:
- Increased brand reputation
- Attraction and retention of top talent
- Stronger employee culture
- Better financial performance
- Improved risk management
- Positive impact on society
To read more about the benefits of taking a stand, check out our article where we dive deeper into the topic.
Is the Risk Worth it for B2B Brands?
Taking a stand is not without risks, especially when it comes to revenue and the bottom line. In an interview with Bank of the West CMO Ben Stuart, he spoke about how the brand had implemented strict financing policies on numerous environmentally harmful sectors, including coal, fracking, and arctic drilling.
This meant saying goodbye to some clients, and yes, the brand did take a revenue hit. But, Bank of the West had to live by its brand values: To only put the money customers put in their bank in places the brand believed in. The revenue hit was quickly mediated with new business in states like California and Colorado, and not only that, the brand began to win high-profile hires as well.
In AXIS’ case, Joe shared that the brand took a calculated and careful approach to lessen negative repercussions from phasing out thermal coal too quickly. Acknowledging that they’d be giving up a certain amount of revenue, the brand also felt like the big bet to grow in the renewable energy space would be worth it in the long run, and so far, it has.
How to Bring ESG Initiatives to Life
Pulled from Joe’s interview, here are 3 essential steps when implementing ESG initiatives.
Explain Why
Transparency is a must, especially when it comes to employees. Given the risk of alienating certain internal and external parties, Joe emphasizes the importance of discussing changes with everyone and seeking opinions from all sides of the issue. Knowing that not everybody would necessarily agree with the decision, AXIS opened a forum for stakeholders to share their views and learn the company’s rationale behind the changes.
Here’s a great quote from Joe about why: “When you take a stand, people are going to talk about you. You may weather some criticism and blowback, but ultimately, if you have the data to show that you’re doing it for the right reasons, that it’s making an impact, and if you have strong support from the C-Level and the board, then you’re doing what you can to set up the organization for success.”
Involve Employees
It’s important to involve employees in the decision-making process and be open to feedback. This can lead to a more well-rounded and effective approach to ESG initiatives, as the unique experiences and expertise of different departments can be leveraged to create the best possible solutions.
Another important aspect of involving employees is ensuring that the initiatives are properly implemented and sustained over time. When employees are involved in the planning and execution of ESG initiatives, they are more likely to be invested in the success and take ownership of implementation. This leads to more effective outcomes and a greater impact on the initiatives in the long term.
As Joe would put it: “There’s never not a reason to have an engaged and excited workforce. But I think as it relates to really bringing your brand to life and advocating your brand? Table stakes.”
Make It Real
Taking a stand should go beyond the launch. As Joe explained: “Making an announcement is just the first step. Roll up your sleeves to support the implementation on the operational side within the business where the real work begins. You have to make it clear to your partners within the business that you’re a committed partner and that you’re going to go beyond just the initial marketing push.”
A Final Thought: Marketing’s Role in ESG
Taking a stand is an opportunity to build a stronger, more vibrant brand with a big impact, and collaboration across all functions is a must. At AXIS, the marketing team is a very leading player in ESG implementation, a catalyst for advancing different initiatives where the business case exists. Why? Because, as Joe shared, the marketing function is horizontal, with insights across the company that can bring people together.
That said, it’s a must that taking a stand doesn’t happen in a silo. From Joe: “This shouldn’t be about getting a win from marketing, it should be about shared successes and having a selfless approach. For ESG, it doesn’t matter who the leader is, as long as we’re able to advance efforts that we think are right for the business and our people.”
To wrap things up, here are three key takeaways to remember when taking a stand as a B2B brand:
- Align ESG initiatives with business priorities and understand why the company has a stake in the game.
- As a leader of the Marketing function, form coalitions and embrace shared success, rather than seeking individual credit.
- Go beyond the launch of ESG initiatives and commit to supporting implementation and operational efforts within the business.