Business leaders are leaning into ESG strategies even though 86% of consumers say they don’t know what it means.

Why it matters: There's no unified way to explain and measure ESG — environmental, social and governance — so it's up to communicators to bridge the knowledge gap.

Between the lines: The "S" in ESG covers issues like labor, pay transparency, representation and workplace health and safety.

• A new Protiviti-Oxford University study found that 60% of C-suite executives under the age of 50 believe ESG will become extremely important to their business strategy over the next decade — and leaders across all age brackets are prioritizing the social piece.

The big picture: Since the term ESG was first coined in 2005, there has been a shift from “the idea of ‘doing no harm’ to ‘this company makes the world a better place,’” says Aniela Unguresan, economist and co-founder of the EDGE certification board, which measures corporate representation, pay equity and policies.

• According to Unguresan, the "S" is a key part of the shift as more business leaders think about diversity, pay equity and protecting their workforce.
• "For PepsiCo, the 'S' is about our company’s soul. It is about what we aim to give our associates, communities and consumers," says Krista Pilot, senior vice president, global external communications. "People are the foundation of the world’s food system and PepsiCo’s business. The 'S' is about our commitment to them."
• "Investors, employees and consumers are increasingly interested in how companies show up in the world," says Abbey Carlton, head of social impact at Indeed. "Our mission naturally lends itself to doing a lot of work around the 'S' pillar, but I don't think any company can afford to ignore this conversation."

State of play: The "S" work is no longer siloed within social impact or DEI teams — these initiatives are being woven into mission statements and business goals.

For example ...

• Accenture has a goal to achieve a 50-50 gender split by 2025.
• Pfizer has incorporated "equity" as a core company value.
• By 2031, Indeed hopes to remove barriers for job seekers and cut the time it takes to find a job by 50%.
• Activation Blizzard launched the Level Up U boot camp to train professionals from underrepresented backgrounds to become full-time engineers.

Zoom in: To be effective, ESG communications must be rooted in action and strike a balance between data and storytelling.

• “Communicators can cultivate a common vision and explain quantitative goals and strategies: This is where we are, this is where we want to go, and this is how we will get there,” Unguresan says.
• And these goals "should be complemented by impactful narratives — which is the heart and soul of what makes this work so important and why we're doing it in the first place," says Carlton. "Messaging in this way will help all stakeholders better understand why this work matters."

Critics believe businesses should prioritize profits and view ESG as a costly distraction that won’t yield long-term results.

Why it matters: Even if a company is moving full steam ahead on ESG, understanding the contrarian point of view is important and will improve messaging.

State of play: Anti-ESG activist investor Vivek Ramaswamy recently sent letters to Apple and Disney, asking them to end specific social initiatives — like racial equity audits of hiring and compensation practices — because they create "severe economic, legal, and reputational risks."

What they're saying: ESG is risky because it “blurs ethics and sound business practices, with the promotion of particular political causes,” says Samuel Gregg, distinguished fellow in political economy and senior research faculty at the American Institute for Economic Research.

• ESG "seems to turn business into an NGO that just happens to pursue profit as one of many different goals. And when there’s a confusion of goals, organizations start to find themselves behaving and acting in dysfunctional ways,” Gregg told Axios.
• “Publicly traded corporations have a fiduciary responsibility to generate a profit — and [if] ESG distracts you from that, you're violating your fiduciary obligations to your shareholders."

Zoom out: No amount of communication can correct a flawed strategy, says Gregg.

Yes, but: The business community should encourage more open discussions about the pros and cons of ESG — and communicators can help.

• "Good communications could foster a serious debate and encourage business leaders to listen to the critiques. That will be a more constructive exercise than whatever they're doing now," Gregg says.
• Ramaswamy agreed, telling CNBC, "... I think we need more open debate representing a more diverse set of perspectives than we've heard in the boardrooms of these companies over the last several years.”

Savvy communicators see open enrollment as an opportunity to promote their company’s benefits and employer brand.

Why it matters: The tight job market coupled with skyrocketing health care costs give potential and current employees more leverage in benefit negotiations — and companies that do so want to make sure everyone knows it.

Driving the news: Comparably released its 2022 list of companies that offer the best benefits, with Microsoft, Adobe and HubSpot taking the top spots.

State of play: Fully covered health care, unlimited time off and fertility and adoption benefits are becoming common offerings.

• Walmart, the largest private employer in the U.S., recently announced that it is adding benefits like coverage for IVF, surrogacy and adoption — and companies like Amazon, Spotify and Bank of America have rolled out similar benefits in recent years.

The bottom line: Comms pros never let a good news hook go to waste — and open enrollment is no exception.

• It’s an opportune time to attract and retain talent by promoting company culture and perks internally and externally.

Arielle Patrick is one of the youngest C-suite executives on Wall Street, overseeing communications for Ariel Investments — the first African American-owned mutual fund manager in the U.S.

Flashback: Patrick initially planned to become a journalist, like her father.

• But during a summer internship at Harper's Bazaar, she noticed that Occupy Wall Street and the financial crisis were pushing big banks to hire communication firms to protect their reputations. The next summer, she started working for one of those firms.

📍How she got here: After graduating from Princeton in 2012, Patrick took a job with Weber Shandwick and later co-created a new practice focused on transaction work like deals, bankruptcies and IPOs.

• From there, Patrick was recruited by Edelman to serve as executive vice president and transaction director.
• A few years later, she got a call from Ariel Investments' co-CEO, Mellody Hobson who was interested in expanding the firm's reach. "When Mellody calls, you answer!" she told Axios.

🪜How it's structured: One of Patrick's first duties as CCO was to restructure how Ariel Investments approached communications.

• She united talent from across the firm into one communications function to oversee media relations, government affairs, philanthropy, marketing, internal, corporate and executive communications, branding and creative.

📈 Trend spot: "Communicators are fixated on the corporate Achilles heel — diversity, equity, inclusion and belonging," says Patrick.

• Yes, but: Communications around diversity must be action driven. "At Ariel, we measure practices across the 'three Ps': people, purchasing and philanthropy."
• "If you’re drafting a client letter or press release about your diversity prowess and these 'three Ps' haven’t been checked — go back to the drawing board," says Patrick.

👟 De-stress routine: Early morning workouts with Iconoclast founder, Ngo Okafor.

📱Most used app: Outlook.

🚨 News alert: "Anything Andrew Ross Sorkin tells me is important in his DealBook newsletter."

📺 Watching: "I’m not so patiently waiting for "Ted Lasso" to come back."

🌅 Morning ritual: Patrick wakes up at 5 am to hit the gym. She feeds her 4-month-old baby around 6, and by 8 she's ready for the workday.

🧠 Best advice: "Always be the most prepared. That’s equally as important as being the smartest. Read everything ... don’t try to wing it."

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Believe it or not, the Axios founders did not create this holiday — though it is very on-brand with Smart Brevity.

• Oct. 13 marks the day President Obama signed the U.S. Plain Writing Act, which seeks to eliminate confusing jargon by requiring federal agencies to use (you guessed it!) plain language to better communicate with the American public.