Is your business ready for the new era of ESG communication?

For SMEs just starting their Environmental, Social, and Governance (ESG) journey – or those already progressing – communicating sustainability and social commitments can feel like navigating a minefield. Ever mindful of the political debate, regulatory changes, and public scepticism, companies have been left confused about how to behave, talk about, and plan ESG initiatives. Yet, there is an increased need for transparency. So how can SMEs communicate and shape ESG strategies effectively when opinions and expectations vary so widely?

ESG IS A LONG-TERM BUSINESS STRATEGY

The truth is that even as some brands scale back ESG messaging, the pressure to act responsibly hasn’t disappeared. PwC’s 2025 State of Decarbonisation report found encouragingly that 84% of companies are standing by their climate commitments. For UK SMEs, recent research from B Lab also shows that B Corps consistently outperform non-B Corps in terms of growth.

The key takeaway is that ESG isn’t a trend – it’s a long-term business strategy. The challenge, therefore, is not whether ESG should be part of corporate strategy but, rather, how businesses can navigate the issue with authenticity and confidence. The need for effective strategic internal and external communication has become even more critical.

A STRATEGIC APPROACH IS NEEDED

When political or business leaders retreat from ESG commitments, the spotlight falls on individual organisations. Ultimately, organisations that are adaptable and pragmatic will see the new opportunities that this divergence of opinion and approaches brings, such as the ability to shape and amplify their own approach to ESG. Ultimately, SMEs that stay silent risk reputational damage, employee dissatisfaction, and diminished investor confidence.

However, the scepticism that exists around companies’ sustainability claims must also be understood. Vacuous or misleading messaging by organisations led to the UK’s Green Claims Code, so there has long been a need to tread carefully. And accusations of greenwashing have never been more damaging, which makes it crucial for businesses to communicate ESG efforts with transparency and credibility. So, with ESG under political and cultural attack in some regions, how should SMEs respond?

UNDERSTAND YOUR AUDIENCE AND THEIR VIEWS

The need to understand all your business’s audiences is more important than ever before. For example, what resonates with investors may differ from what inspires employees. International markets will also require nuanced approaches. For example, in the US, ESG terminology could trigger a backlash, while in the UK, DEI and sustainability messaging remain widely accepted. Customers are also a critical audience; PwC’s report showed that more than four-fifths of consumers say they are willing to pay more for sustainable products, despite cost-of-living pressures. This makes clear and consistent communication of ESG commitments a core part of driving business value.

If your initiatives are in line with your purpose and values, there may be a need to educate these stakeholders on the benefits of ESG initiatives. Explain what’s in it for them. Why should they care, and how can they benefit from the ESG agenda? Demonstrating the long-term benefits of your ESG initiatives helps stakeholders understand the value your company brings to the table.

EMPLOYEES ARE ALSO YOUR AUDIENCE

Internal engagement is another critical component of effective ESG communication. Historically, internal communications may have been overshadowed by external announcements, but SMEs that cultivate a purpose-driven culture and integrate ESG and DEI into everyday work benefit from stronger employee alignment and loyalty.

See Also

How to navigate the “bad” business advice

Research by Deloitte shows that purpose-driven companies are three times more likely to retain talent due to higher levels of employee engagement and job satisfaction. A strong employer brand not only attracts the right people but also reinforces ESG values internally, protecting long-term reputation and guiding the future direction of the company.

USE EVERY CHANNEL AVAILABLE

When competitors retreat from ESG discussions, SMEs have an opportunity to stand out. Using owned channels, such as the website, social media, and video content, allows companies to control the narrative, humanise the brand, and showcase both challenges and achievements. Encouraging employees to become ESG advocates online amplifies this messaging and builds credibility. Industry publications increasingly welcome ESG content from leaders willing to discuss the real challenges and successes of their initiatives, making transparency and storytelling key to maintaining trust.

The coming years may be challenging, but the clear need for effective ESG communication remains. The principles of ESG – strong governance, environmental responsibility, and social accountability – are here to stay. SMEs that communicate them strategically and authentically will protect their reputation, engage employees, and unlock long-term business value.