OPINION: 5 ESG marketing strategies to attract the right investors

Anna Stella, CEO of marketing outsourcing agency BBSA, explains how to win investor trust in ESG.

ESG investments are growing exponentially, fuelled by investor demand and their need to make a difference. A recent study by Harvard Law School has shown that as investors get to know ESG investments, they become more conscious of its challenges. Data challenges continue, however, to be a critical issue. Difficulties with data quality and accessibility, coupled with inconsistent ratings, are hampering investors’ ability to fully adopt, incorporate and implement ESG.

Here are five investment marketing hacks that can help attract investors.

Marketing Hack no. 1: Recognize that investors might see ESG differently Investing in ESG looks different to each investor. Some might see it as an indispensable means of support for crucial global social and environmental causes. Others see it as a current industry fad and a way to attract millennial investors. Yet often, funds are marketed as ESG without the genuine credentials to do justice to the label.

While the importance and value of authentic ESG investment marketing have become more apparent in the past decade, many firms seem to still miss the mark.

The most successful ESG marketing strategies do focus on transparency on the qualifying criteria of each investment, highlighting details on their investment mandate. As investors see ESG differently, forging connections with ambassadors, consultants, and interest groups, is increasingly taking a centrepiece of the marketing strategy as both a way to raise awareness for new types of investments and gain their ‘seal of approval’ from experts.

Marketing hack no. 2: Get real about ESG impact and commitment in your marketing messages 

In the past, greenwashing has given many investors a bad experience, and to counter this, marketing messages should focus significantly on true ESG commitment and projected impact. Companies should steer clear of greenwashing by ensuring their ESG marketing campaigns are credible and by avoiding exaggerating their company’s environmental claims in social communications.

As you describe your investment commitment, investors will get confident in your investment expertise, strategy, and vision. Commitment can also be showcased by integrating ESG investment strategies visually, such as ESG scores with fund overviews.

Marketing hack no. 3: Write a purposeful marketing strategy

Investors make high-risk investments to make money, expecting a return on their investment. However, sound financial performance is only a part of an ESG investment choice; investors have a preference for companies they believe offer investments with attractive ESG criteria. Marketing should address these investors’ needs by communicating how the company’s views and values are shaping ESG.

Writing an outstanding ESG marketing strategy is crucial to businesses that want to gain the interest of investors. While emotional pleas can aid ESG investment marketing activities, the strategy should also be cantered on promoting long-term portfolio growth, clearly explaining why business decisions, such as sustainable policies, will lead to it.

Marketing hack no. 4: Understanding and recognizing investors in your niche

Recent studies have shown that top ESG asset classes are equities, bonds/fixed income, alternatives and private markets, emerging markets, real estate, and commodities. Despite ESG investment being on the rise, this attractive proposition is not a good fit for all investors. From a marketing perspective, we need to avoid budget dilution by making sure you are only talking to the right investors. Understanding and aligning to investors’ values also play a key role in ESG marketing, as unmatched values could hinder long-term investment.

Effective marketing should be about understanding the needs of your investors’ audience, drafting the right message, and delivering them at the right time. Key marketing questions needing answers are what niches they currently and would like to invest in, where they invest, and what is their investment potential.

Marketing hack no. 5: Tackling adoption barriers

The biggest barriers for investors to adopt, incorporate and implement ESG

investments are a lack of robust data and of consistency in ESG scores. Furthermore, investors struggle with the need to interpret and analyse third-party ESG data, citing considerable differences in types of the disclosed information by asset class, region, or provider.

While data remains investors’ greatest hindrance, help often lies in great marketing.   Marketing could and should focus on ongoing ESG education and training that would assist with ESG analysis and promotion.

Other top key ESG investment barriers that should be tackled head-on at a marketing level are the uneasiness regarding sacrificing returns and greenwashing. ESG is more than good intentions, and marketing communications must be cantered on creating meaning while delivering measurable value.
While views on greenwashing are mixed, there is a real concern that some companies might use ESG as a marketing and PR tool. Therefore, you should steer clear of universal messaging. A global-regional-local marketing alignment is crucial to send error-free messages that are consistent across geographies and yet applicable in a local context.

Anna Stella is a two-time national award-winning marketing expert, academic researcher, and CEO of the global marketing outsourcing agency BBSA. Anna has 20+ years of experience within the B2B, B2C, and non-profit industries. Clients include Volkswagen AG, the Government, NewsCorp, the European Union, RICS, and Rational AG, just to name a few. Anna is one of the few global experts in marketing outsourcing her key achievements include winning the 2014 Institute of Directors Henley Competition and the 2012 RICS Social Media Marketing Award.