October 2024
Introduction
Only a few years ago, MNCs who were first to market with their net zero and climate announcements were met with fanfare and media interest, resulting in a positive brand halo for what was broadly seen as good corporate stewardship. However, new research conducted by 996 Advisors found the share of conversation about MNCs’ sustainability initiatives in traditional and social media has been on the decline since 2022. The impact being these channels are not as effective as once thought at amplifying ESG messages and may invite additional reputation risk in the current risk-reward landscape.
The Climate Conversation is Shrinking
After analyzing 27 months of news data from Tier 1 media1, in English, Chinese, French, and Spanish. The number of mentions of climate change, ESG, net-zero and associated keywords was consistently down across the first half of 2024, compared to previous year, with all four languages were down, and in some cases by as much as 38%.
To see if this trend was exclusive to traditional media, 996 Advisors also analyzed climate change discussions on social media, finding a similar pattern with a decrease in volume between 10% to 33% in the four studied languages. The consistent decline across both media types suggests window to engage consumers and other stakeholders on a company’s sustainability efforts has shrunk significantly.
Impact on Corporate ESG Communications
When we narrow in on how the climate conversation is impacting MNCs, we are seeing evidence the peak of climate interest was in 2022 when MNCs were garnering big headlines for making bold ESG and Net-Zero commitments. As of Q2 2024, the overall mentions of the Fortune 100 related to climate change or ESG has dropped by 45% compared to the previous year.
It is important to point out that this does not hold true in some markets. High-profile media show consistent interest in the climate-related actions of Fortune 100 companies in developing and emerging markets, accounting for an average of 10% of their climate media coverage. These stories typically follow two narratives. One highlights the initiatives of multinational corporations towards environmental protection and local economic growth. The other reveals reputational risks arising from unmet commitments or negative environmental impacts in these markets, which are then magnified through international media.
To better understand the reputational impact of ESG and climate commitments, we examined the media coverage of 4 MNCs and their net sentiment of media coverage as our measure of reputation for each brand. Net sentiment measures how much of the conversation mentioning the brand is described in a positive way versus being neutral or using negative language. We then dive deeper to establish how much of the overall positive content for each brand could be attributed to their climate and ESG commitments.
We found the media coverage of these MNCs’ climate and ESG initiatives is relatively minor, accounting for roughly 3% to 4% of their total coverage. Although the climate coverage they’ve garnered is generally more positive than other coverage, it’s such a small portion that its effect on reputation is minimal, with the highest impact at 0.17%.
Source:996 Analysis of Tier 1 Media Coverage in English, Chinese, French and Spanish. “Net sentiment” is calculated by percentage of positive mentions minus percentage of negative mentions.
Based on the above data, coupled with the increased polarization of the conversation, promoting ESG and climate commitments in media channels is no longer delivering the positive reputational impact that it used to. The reasons behind this change are numerous, and will include change in perception among editors, clicking habits of readers, and the normal media cycle that will focus on new and emerging stories.
The key takeaway for communicators and reputation managers is to carefully asses your channel strategy and don’t default to what has worked in the past as it not only could be a waste of effort and resources, but could also invite reputation risk from groups who disagree with your strategy.
Growing Polarization
An ESG strategy is critical to build positive reputation with specific stakeholders, but there are diverging opinions to be mindful of. A small but growing group of influential voices are expressing their skepticism on the role of MNC’s in fighting climate change. At the same time, climate advocates continue to press companies to meet environmental requirements that may or may not be feasible. This can leave MNCs between a rock and a hard place as they try to navigate opposing viewpoints, leading some to adopt greenhushing to downplay their ESG strategies.
Our research observed politicians and anti-woke activists now more than ever are growing their share of voice in Tier 1 media and social media associating climate change with a hoax or scam. Their small but increasingly pointed opinion cannot be ignored as their ability to influence means companies should take a cautious approach when communicating their plans.
Companies are already familiar with the reputational impact of greenwashing accusations from climate advocates, with their ability to name and shame companies who fall short of stated commitments or fail as environmental stewards. Now with diametrically opposed narratives in play, companies who take action to appease one interest group will likely face attack from the other. Factor in geographical differences in perception and multinational companies are walking a tightrope trying to appease everyone.
Number of Articles that mention climate skepticism, per capita
Source: 996 analysis of Tier 1 English Media April 2022-June 2024
This is where data intelligence about stakeholder interests, channels, influencers and issues can uncover the political, cultural or geographic insights necessary to reach audiences keen to understand a company’s sustainability plan and mitigate against the reputation risk of opportunists looking to use companies as a means to promote their agenda. Once armed with this data, senior managers can make informed decisions about the reputation risk trade offs, the severity of the reputation risk and, most importantly, what actions they can take to manage the risk.
How to Find Balance
How MNCs position and message their ESG strategies needs careful consideration to anticipate how their stakeholders may react. Here are three steps to take to proactively manage reputation in a dynamic environment:
1. Collect data intelligence to understand stakeholder perceptions on ESG. Within this dataset it is important to uncover geographic variations and how much impact each stakeholder has on your social license to operate. Maintain regular monitoring as perceptions change over time.
2. Be mindful of your channel strategy. Traditional and social media channels may not be the most effective way to amplify your message and may invite unintentional reputation risk. Mine your data to discover precise ways of reaching your audiences that consider geographic, political, and cultural differences to improve message penetration and mitigate reputation risk from naysayers.
3. Pay close attention to supply chain and operations in developing and emerging markets. Manage the reputation risks and highlight examples of good corporate citizenship.
Methodology
996 Advisors analyzed 1.2 million articles from tier 1 global media (650k in English, 380k in Spanish, 144k in Chinese, 77k in French) between April 2022 to April 2024, plus approximately 150 million social media posts across X, Reddit, blogs and forums (approximate universe of 141m English, 26m Spanish, 8m French, 3m Chinese).
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