How Apple does its ESG communications math

Tom Corfman is a senior consultant with Ragan Consulting, where he leads the ESG practice by helping communicators show their value to their organizations.

While experts debate how much boost to the bottom line comes from sound Environmental Social and Governance practices, there’s one area where spending will show a clear return on investment — ESG communications.

To Apple, it’s simple math involving big numbers. It’s cheaper to spend a small sum (for Apple) to polish its reputation and to avoid a big hit. Your organization can do the same arithmetic, although likely with less lofty numbers.

Many companies are trying to figure out how to better organize all the effort they’re putting into ESG to achieve the biggest benefit. What’s the proper role of investor relations? What should marketing do? HR? Diversity offices? Sustainability teams?

These folks can all contribute, but communicators are in the best position to build their company’s ESG reputation. Employing the journalistic tools of fact-based reporting and storytelling will demonstrate to skeptical audiences how their companies are, for example, reducing their carbon footprint or adding diversity to their upper ranks. Clear analysis will dispel concerns about greenwashing and build credibility by acknowledging when, and why, the company falls short of its ESG goals.

Step-by-step, here’s how one of the world’s most valuable brands does the calculation, according to Apple’s 2021 Climate Change Report filed with reporting organization CDP.

• Climate change is important to Apple’s stakeholders.
• Apple’s actions and inactions on climate change could create risk to its reputation.
• Apple’s brand is reportedly worth over $322 billion.
• A hypothetical 0.1% decrease in that brand value due to a lack of transparency or a poor reputation related to climate change could represent a $322 million loss of brand value.
• “The cost of disseminating clear, accurate information about Apple’s climate change agenda is low—less than 0.01 percent of Apple’s annual operating expenses, or less than $3.86 million.”

The media relations team of the Cupertino, Calif.-based tech giant did not return emails and telephone calls requesting comment.

Some communicators are already taking a bigger role. In the U.S., 20% of communicators say they are more involved in ESG communications compared with last year, according to a recent survey by Cision and PR Week. And 28% say they are more involved in ESG’s cousin, Diversity, Equity and Inclusion. This trend will intensify if the Securities and Exchange Commission announces its new rules on climate-change disclosure in April as expected.

If communicators get resources to match these new responsibilities, their companies will get more than feel-good moments.

“Judgments about a company’s sustainability performance affect talent acquisition and retention, access to capital, and consumer choices,” a team from Big 4 accounting firm Ernst & Young Global Ltd. writes.

Communicators can make that case because people want businesses to be more engaged in social issues, not less, according to the 2023 Edelman Trust Barometer.

At least 50% of those surveyed said business was not doing enough and should do more on climate change and economic inequality. Nearly 50% said business was not doing enough on health care access.

But companies must choose their issues carefully. In the U.S., 48% said they think business can avoid being political when addressing contentious social issues. Edelman sees that as sign that the U.S. is severely politicized. To Edelman, the higher the percentage that agree with that statement, the less politicized a country is.

Of course, 60% of those surveyed in China said business can address issues and avoid politics. So where would you rather be?

People no longer blindly accept companies’ claims, according to a study released in October by marketing firm WE Communications and survey company YouGov.

“Seventy-four percent of our consumer respondents tell us they want companies to be more publicly transparent about how they’re responding to current and emerging issues in society,” the report says. “When asked why they are skeptical that brands will achieve their goals, the No. 1 answer was: ‘Lack of data.’”

Having accurate data is crucial. But data doesn’t speak for itself. Communicators must tell those stories by highlighting the people who are doing the ESG work and are benefiting from it. Slick marketing and “look-at-us” press releases only intensify distrust.

Despite recession jitters, the “C-suite overall is in favor of increasing marketing spend,” according to the Conference Board’s C-Suite Outlook 2023, released last month. To get a fair share of the budget, communicators must make their case.