Chief Marketing Officer (CMO)
With social media’s prevalence and 24/7 news cycles, companies are under constant scrutiny by customers, investors and stakeholders. The opportunity to expose ESG negligence is high on the list for those looking to make a splash. Organizations will need to go beyond simply telling consumers why their product is best and why their ESG practices are genuine. They’ll need to prove it and show why the product and the organization are worth the consumers’ investment. The prevalence of advertising fraud, brand safety and data breaches present significant ESG risks, as does consumers’ increasing vigilance for brands that attempt to “purpose-wash.”
What are the top 3 things the CMO should activate immediately?
What are the CMO’s key considerations with respect to ESG risk?
Marketing strategy
CMOs are responsible for determining the brand’s direction and marketing strategies with an objective of increasing brand awareness and the top line (revenues). The CMO has a significant role to play in setting the course of a company’s ESG risk strategy and sharing the added value to the society story with employees, consumers and stakeholders. From social media to the company’s vision and mission statement and the message to investors, the CMO should consider how an ESG-informed marketing strategy will be integrated throughout the company brand. Centering marketing efforts around the company’s sustainability, DEI and employee well-being strategies, and then telling that story effectively will increase brand loyalty and value – and will ensure every touch point between the organization and the consumers of tomorrow is taken into consideration. Moreover, there is increasing evidence that doing so substantially improves top-line performance. Companies with an above average customer experience and employee experience outperform the laggards in the market by 15%, according to Qualtrics.¹ And Genomatica found that 55% of consumers want brands to provide a transparent and accessible way to shop sustainably.²
15%
according to Qualtrics.
And Genomatica found that
55%
of consumers want brands to provide a transparent and accessible way to shop sustainably.
Understand what your data is telling you
CMOs have a heavy reliance on the use of data analytics to understand their organization’s environmental footprint, conduct market research and data analysis on their target market, understand the current customer experience (think of the largest customer population being Gen Z and millennials) and be informed about market trends to figure out how to best reach their demographic and make sales. One of the biggest challenges the CMO will face in executing their role with the ESG Risk strategy is the ability to get consistent and reliable data sources. Sustainability-conscious customers will be on the lookout for attempts to “greenwash” products and services. The CMO can protect against this, and secure the company’s reputation, by ensuring that the company’s messaging regarding its ESG work reflects what is happening in the organization.
How EY can help
Sustainability and ESG strategy services
EY teams can help you create long-term sustainability and ESG value through strategy, M&A, capital allocation, ESG due diligence and portfolio optimization.
Read moreSharing your story
The most effective marketing strategies in any business involve sharing an engaging story.
The CMO needs to work across product lifecycles and business units to develop a narrative that effectively conveys what the company is doing, including setting and communicating ESG goals. This will also add an element of accountability from investors, employees and customers. The company’s story should consider how ESG risks will be integrated throughout the company brand. Talk to your people, learn about the challenges they face, the ambition they used and the results they earned through their efforts.
