Navigating the Complexities of Responsible Business – Insights from London’s RBU Launch Event

In a recent gathering, industry leaders and innovators convened to discuss the evolving role of responsible business practices, with a special focus on Environmental, Social, and Governance (ESG) strategies. Hosted by Clarity's Responsible Business Unit (RBU), the breakfast event highlighted the challenges, opportunities, and the essential need for authentic storytelling and stakeholder engagement to drive impactful sustainability initiatives. Here are some key insights from the discussion.

Responsible Business: Playing to Strengths and Addressing Weaknesses

The conversation kicked off with a reflection on how companies can strengthen their approach to responsible business by focusing on their core strengths and addressing internal weaknesses. Leaders underscored the power of emphasising positive impact—moving beyond mitigating harm to contributing positively to society and the environment. This approach is becoming essential as businesses grapple with the intense demands of ESG and Diversity, Equity, and Inclusion (DEI) initiatives.

However, the discussions also revealed a prevailing challenge: many organisations, especially in today’s complex economic environment, operate in "survivor mode," often sidelining long-term ESG goals to address immediate operational pressures. The need for resilience while pursuing sustainable growth remains a balancing act that businesses are still working to master.

Overcoming ESG Perceptions and Headline Fatigue

A significant barrier to effective ESG integration lies in public perception. Speakers noted that ESG topics are often sensationalised in media headlines, leading to misconceptions about their intentions and outcomes. For companies working toward genuine impact, these narratives can obscure their progress, creating mistrust among stakeholders and perpetuating scepticism.

To counter this, experts emphasised the importance of clear, honest communication that showcases both achievements and challenges in sustainability, as well as clear metrics that can be used to benchmark success. A well-crafted communication strategy can not only demystify ESG goals but also foster trust with both internal and external audiences, providing a more balanced understanding of a company’s journey and where they are headed.

“For bigger companies, the aim should be identifying weaknesses that need addressing and communicating that to stakeholders with the aim of improvement”, said Isabel Kelly, ESG, social impact and purpose strategy consultant. “The data being collected not only helps to show the gaps but it also supports how much progress is being made and what else needs to be done.”

The Employee’s Role in Driving Sustainability

Another recurring theme was the role of employees as crucial drivers of sustainable practices. Examples from startups and larger corporations showed that employee actions can significantly influence corporate sustainability efforts. For instance, a featured startup revealed how its sustainability strategies were largely inspired by employee demands for eco-conscious business operations.

The event also highlighted how fostering a culture of openness and continuous engagement with employees can build a strong foundation for sustainable transformation. Internal communication teams were noted as key players in educating and inspiring the workforce, helping employees align with the company’s vision and actively contribute to sustainability goals.

The Investor's Perspective: Balancing Value and ESG Integration

The influence of investors in promoting ESG practices came under the spotlight as well. Many investors today face a dilemma: while there's a growing desire to support ESG-focused companies, concerns around "greenwashing" and the perceived lower returns on sustainable investments often lead to hesitation. Additionally, short-term thinking continues to dominate investment decisions, overshadowing the potential long-term gains of prioritising ESG.

Private equity firms and institutional investors, however, are beginning to push for more transparent ESG reporting. This trend is reshaping how businesses approach sustainability, placing pressure on them to demonstrate not only compliance but also tangible contributions to environmental and social causes.

“We need to get to the point where leaders understand the business case for sustainability. At the moment, most organisations are rushing to set carbon targets based on one dimensional reasons such as regulation, which is a perfectly valid reason, but doesn’t give sufficient insight into the potential for profitable growth through sustainability.

“Ensuring we understand all the benefits to all stakeholders groups will enable sustainability to be written into each business’s strategic imperative - in everything you do and ingrained into every employee and every action the business takes. Only this way can owners, investors, and funding organisations see the real value of sustainability as a driver for increased profitability,” said Anthony Levy, founder & Chairman, Circularity First 

Addressing Greenwashing and Building Trust

The challenge of greenwashing, where companies exaggerate their sustainability efforts or downplay their impacts, was a significant point of discussion. Companies like Unilever and Microsoft, for instance, have recently faced scrutiny for stepping back on certain sustainability goals. This scrutiny highlights the tension between ambitious targets and the real-world hurdles that sometimes impede progress.

In the face of increasing regulation and stakeholder scrutiny, businesses need to balance ambition with transparency. Rather than merely showcasing "wins," companies must be willing to address setbacks openly, presenting an honest picture of their efforts. This transparency not only combats greenwashing accusations but also builds lasting trust with stakeholders who are looking for genuine, rather than performative, sustainability.

Consumer Behaviour and Effective Storytelling

Consumers are demanding greater accountability and transparency from companies regarding their sustainability initiatives. This demand is pushing organisations to improve how they communicate their sustainability journey. The conversation emphasised the importance of storytelling—painting a compelling, authentic narrative that resonates with consumers and other stakeholders.

It was noted that startups often lead in this area, leveraging storytelling to effectively communicate their mission-driven values. Larger organisations, however, sometimes struggle with balancing corporate messaging and authenticity. Speakers advised focusing on empathy and relatability, ensuring that messages are understandable and relevant to the challenges consumers care about, including diversity and inclusion.

“Our business has evolved with DEI and sustainability in our DNA because we worked really hard on ensuring this was a focus when we started out. Increasingly this is table stakes for many businesses and those that aren’t focused on it will be deemed unacceptable to the best talent and lose out with their target consumers”, said Tom Fraine, co-CEO, Zoa

Future Directions for Responsible Business and Communication

As organisations continue to navigate the complexities of sustainability, one thing remains clear: the road to impactful ESG integration requires ongoing stakeholder engagement, transparency, and a commitment to authentic storytelling. Companies that prioritise these principles will be well-positioned to foster trust and drive meaningful change in today’s increasingly eco-conscious and socially aware market. 

Steps that internal communicators and stakeholders should take include:

1. Review the company’s sustainability communication strategy to ensure that messaging is authentic and progress-focused.
2. Integrate sustainability metrics into core financial reporting to underscore ESG as a business imperative.
3. Engage with the social impact committee to refine ESG communication tactics and address potential hurdles.
4. Follow up with leading sustainability-driven startups to explore innovative, consumer-driven sustainability strategies.

The path forward may be complex, but by embracing these action items and committing to transparency, companies can overcome the challenges associated with responsible business and make a lasting impact. As the ESG landscape continues to evolve, companies that lead with integrity, communicate authentically, and engage stakeholders effectively will be best equipped to thrive in the years ahead.

Featured image by Danist Soh on UnSplash