The concern for the environment and society is growing among companies and investors. Businesses polluting the environment or offering a toxic work environment for employees might face backlash in today’s era. Besides the fear of being canceled, compliance rules also prevent companies from leaving a negative impact on the environment and society.
Compliance with ESG (Environmental, Social, and Governance) can help a company become more sustainable. Companies also communicate their ESG strategies to attract more investors. Asset managers, fund managers, and brokers also indulge in ESG Investment Writing.
Read on to understand more about investment writing for ESG.
What Exactly is ESG Investment Writing?
Before delving deeper, it is essential to understand the ESG factors. As discussed above, ESG combines environmental, social, and governance factors. Carbon footprint, waste management, and energy efficiency are environmental factors. Similarly, social factors include labor practices, human rights, product safety, and others. Companies also consider governance factors like board diversity, shareholder engagement, ethical business conduct, and whistleblower protection. Companies try to include these ESG factors into their business strategies to maintain sustainability. More investors are attracted when a company is sustainable or has a good ESG score. Companies can communicate or advertise their ESG practices to attract more investors.
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In investment writing, entities can communicate their ESG efforts to investors or stakeholders. Companies create written content to promote their ESG practices. ESG investment writing helps companies create research reports, market commentaries, white papers, fund fact sheets, investor newsletters, regulatory filings, blogs, and articles. Written content created through investment writing provides a clear picture to investors and stakeholders. Besides corporate entities, asset managers, fund houses, brokers, and investment consultants also indulge in investment writing. For instance, investment consultants are responsible for finding sustainable client opportunities. Consultants, asset managers, and brokers indulge in ESG research and compile reports/commentaries for their clients through investment writing.
Proven Strategies for ESG Investment Writing
Investment writing can be a complex process for some companies. Remember that you cannot include false claims in your ESG communications. It will taint the company’s image in front of investors or stakeholders. You might have heard of companies blamed for greenwashing or social washing recently. Similarly, asset managers or fund houses might lose clients when found guilty of publishing inaccurate ESG reports.
Here are some proven strategies for ESG investment writing:
Back Your Claims with Data
Companies cannot get away by including fluff in their ESG reports. Investors and stakeholders demand data-driven insights to make decisions. For instance, you can only claim to be environment-friendly by including relevant data points in ESG reports. When a company is environment-friendly, it can include its carbon emissions, waste production, energy efficiency, and other data points in ESG reports. Holistic data inclusion reduces the chances of greenwashing or rainbow washing for a company.
Work with a Third-Party Research Firm
Collecting ESG data can be a challenge for companies. Since including relevant data points in ESG reports is mandatory, companies can partner with third-party research firms. These research firms will collect ESG data from different sources and produce meaningful insights. Companies get access to readymade ESG metrics by partnering with reputed research firms. Third-party research firms also help companies compile and publish reports or commentaries. Asset managers, brokers, and other entities partner with third-party research firms for support for investment writing.
Research Your Investors and Stakeholders
There are a range of ESG factors for consideration. Companies might need help to work on all ESG factors simultaneously. For the same rationale, companies start by working on ESG factors preferred by their investors and stakeholders. For instance, let us say the stakeholders of a company want a hospitable work environment for all employees. In such a case, the company must first focus on improving its governance factors. Similarly, investment reports or commentaries are created based on the interests of investors. Research the sustainability factors investors prefer and include them in ESG reports, commentaries, or newsletters.
Use the Right Channels for Publishing
Due diligence or KYC (Know Your Customer) is essential before indulging in investment writing, as it helps find the channels preferred by your clients, investors, or stakeholders for accessing reports, newsletters, or commentaries. Each digital platform for publishing investment reports is different. For the same rationale, it is essential to tailor or fine-tune your reports based on the publishing channel. Companies can also develop new and engaging ways to publish investment reports or commentaries.
Conclusion
Investment writing in ESG can be a challenging task for companies, especially when they are guessing. Say no to guesses or fluffs, and include valuable insights in your reports or commentaries.
ESG investment writing helps catch the reader’s attention and reduces the chances of greenwashing or social washing.