Top ESG Trends for 2024 and how they impact PR

In a business environment charged with environmental, social and governance challenges, the role of public relations professionals has expanded to encompass far more than just pitching a compelling company narrative to the press.

PR has evolved due to changes in technology, society, climate and the media landscape. PR professionals must now keep up with rapidly changing scenery, and incorporate new services such as ESG offerings into their repertoire.

Recent developments which look to be prominent on agendas into next year include the controversial nature of carbon offset projects, the importance of biodiversity in business, and the sweeping changes to sustainability reports brought about by the European Sustainability Reporting Standard (ESRS) and other legislative frameworks.

As the world of ESG evolves, these developments have knock-on effects on PR efforts. Let’s take a look ahead at AMBITIOUS’s top 2024 ESG trends, and their implications for PR professionals.

1. Carbon Offsets

Research this year found that carbon offset projects may not cut planet-heating emissions, and accusations of land-grabbing in Brazil under the guise of carbon offset projects came to light. Carbon offsetting, and the carbon markets which they form part of, are highly disputed topics.

Experts warn against the image of carbon offsets as a silver bullet for climate change, but inevitably carbon offsets will have a role in achieving climate targets. Many governments, corporations and businesses have made pledges of either carbon neutrality or net zero by 2030, in line with the Paris Agreement.

The closer we get to 2030, the greater the pressure to reduce carbon footprints. For PR professionals, the challenge will be keeping up with current trends around carbon offsetting, and advising clients on the right framing for carbon offsetting as part of wider net zero transition plans.

It’s important to have honest conversations about where your clients are on their net zero journey so you can be transparent in the run-up to 2030. It might also be helpful to make a crisis comms plan, should businesses not be successful in their pledges.

2. Biodiversity in Business

Businesses are beginning to move beyond thinking about their global warming and carbon footprint, towards measuring their impact on nature and focusing on nature restoration in their investment decisions. The Taskforce on Nature-based Financial Disclosures (TNFD) published its final set of recommendations during New York Climate Week in August this year, particularly relevant for financial institutions. Edie has been running a series of webinars on biodiversity in business, showing that this is a trending topic which is relevant for businesses.

By reporting in line with the TNFD, businesses will be providing information in a consistent format to stakeholders including regulators and investors. Biodiversity and corporate nature-related disclosures are also set to remain front of mind long-term, after the treaty signed by more than 180 nations at the biodiversity COP15 in December 2022, committed signatories to mandate nature-related reporting for large companies by the end of this decade.

With a maze of different regulations, standards and frameworks in the ESG space, the challenge for PR professionals will be knowing where it all fits in for their clients. Working together with in-house Sustainability Officers to collect data and create high-quality data and reports will be crucial.

3. European Sustainability Reporting Standard (ESRS) and CSRD

The ESRS is a set of standards which outline how companies should report their impact on people and the external environment, as well as reporting on financial risks and opportunities impacted by environmental and social issues. This new set of ESG disclosure rules comes into force for the largest businesses in January 2024, so we can expect this to be a dominant trend in the world of ESG next year. The Corporate Sustainability Reporting Directive (CSRD) is the legislation which requires EU companies to implement the ESRS, evaluate the sustainability of their operations themselves and publicly disclose relevant data for investors and stakeholders.

These moves form part of the European Green Deal, which sets a framework pathway for reaching the EU’s climate objectives. The timelines for compliance depend on the size and nature of companies’ operations in the EU, but more than 50,000 businesses are expected to be directly impacted by these requirements, and the regulations will have an indirect impact on businesses across supply chains too.

Many PR professionals may work at SMEs themselves, and so will be directly affected by these disclosure standards. The data collected within these frameworks represent another proof point for corporations’ ESG progress. With effective implementation, the disclosures are further evidence that greenwashing has been avoided, and can be tools in the PR arsenal, whether in the form of an ESG report or as proof points for media materials.

4. Supply chains

There is growing awareness and concern among consumers, investors, and regulatory bodies about ethical and sustainable supply chain practices. Now it is SMEs, and not only large businesses, who are facing greater pressure to be responsible for their supply chains, ensuring that they adhere to environmental, social, and governance (ESG) standards.

Many SMEs operate in global supply chains, which can be complex and may involve suppliers from various countries. As supply chains become more interconnected, the potential for risks related to labour practices, environmental impact, and compliance increases.

Supply chain management will be a hot topic in 2024 as mandatory ESG reporting on social criteria comes into play, touching on violations such as child labour and forced labour. Some countries and regions have introduced regulations requiring businesses, including SMEs, to report on their supply chain practices. For example, in 2023, Germany unveiled changes to the Supply Chains Act, meaning that German companies and companies with German branches must address social and environmental due diligence obligations in their supply chains.

For PR professionals working with businesses with complex supply chains – transparency and clear communication with businesses should be a priority. Ethical practices, such as fair labour conditions and responsible sourcing, are essential for well-being and the social dimension of ESG. Especially for multi-national businesses, ESG strategy that incorporates issues such as indigenous reconciliation may be relevant. Companies that prioritize these aspects in their supply chain management may see benefits in terms of reputation and stakeholder trust – with a positive impact on the company balance sheet too.

5. Skills and talent attraction

A recent report by Total Jobs found that UK companies are proactively recruiting for new sustainability roles and are investing in sustainability skills. The wider market is experiencing a slowdown in hiring in response to the economic climate, but sustainability hiring is opposing this: accelerating while the rest decelerates.

It’s important to make sure that businesses are implementing sustainability structurally, as well as hiring new talent. A 2023 report by Indeed found that Gen Z and Millennial workers prioritise sustainability, with 16% of millennials having already switched jobs in favour of careers that align with their values, and 23% prepared to do so.

New applicants are increasingly scrutinising ESG data, ESG issues and credentials before choosing a role, so PR teams have a role to play in ensuring company commitments are being communicated to potential employees. Using an ESG report with messaging on climate-related matters to attract and retain new talent to corporate, sustainability or not sustainability-based roles will be a priority for PR professionals in 2024.

6. Sustainable Development Goals (‘SDGs’)

In 2023 we reached the halfway point between when the SDGs were established in 2015 and the 2030 deadline. Increased awareness of the SDGs because of this halfway point has led to wider implementation by businesses and corporates beyond the charity sector where they were already established.

It was found that the private sector is a “critical stakeholder” in the SDGs, and accelerated action from the sector could support a leap forward in their implementation. The SDGs call for collective action from governments, society, businesses, communities, the public sector, and individuals, to drive positive change, all aligned with the same governance framework to achieve the greatest impact.

While new reporting obligations may seem like a headache, this framework is helpful in that it combines all the elements of ESG performance including environmental impact and social equity. It is key that businesses are honest about where they have impacts, either helpful or harmful, and report actions to drive positive change. This framework offers business opportunities to have stringent reporting standards and a positive impact on environmental issues and on human rights across all the letters of ESG and create opportunities for responsible investment.

7. The role of the courts

Climate litigation mentions in the media have increased over recent years, with a 99% increase in mentions in the global media since last year, with no signs of stopping. Chris Packham has recently started a case against the UK government, and earlier this year there was a landmark case with six Portuguese young people taking 32 countries to court over climate change in the European Court of Human Rights.

In parallel, the legislation surrounding greenwashing is becoming more stringent, leading to concerns over fines and other legal implications. Here once more, communications and marketing teams have a responsibility to learn about these rules and collaborate with stakeholders and legal and sustainability teams, emphasising the importance of due diligence and forecasting climate-related risks and ESG risks.

The ESG lens

There were many more topics we could have included in this blog: climate-related financial disclosures, ESG risk and climate risk management, or the exponential growth of renewable energy.

In this ever-evolving ESG landscape, PR professionals play a role in helping businesses navigate the complexities, communicate transparently, and build trust among stakeholders. Staying informed and proactive in addressing these trends will be crucial to success in 2024, and beyond.

For many businesses, a key trend is the roll-out of new, mandatory, frameworks and reporting standards, and the focus on a wider range of ESG metrics to include in ESG reporting. The key is to stay ahead of trends, rely on the support of key stakeholders and experts in ESG disclosures and be honest and transparent.

If you want to learn about transforming your ESG measures into effective ESG communications, contact us.

To find out more about how you can better communicate your ESG strategies and messaging, you can download our e-book.