Storytelling through numbers: how compelling narratives drive ESG investment choices
At the core of every number lies a captivating story, waiting to be shared.
The challenge lies not only in presenting ESG data, but doing so in a manner that resonates, educates, and inspires
In the ever-evolving world of finance, fintech is revolutionising how investors perceive value, not only in terms of financial returns, but also in the broader scope of environmental, social, and governance (ESG) impacts. However, the challenge lies in transforming raw ESG data into meaningful narratives.
The challenge
The main issue at hand is simple: numbers, in their raw form, lack personal connection and are often difficult to relate to. For instance, if an ESG report states that a company reduced its carbon footprint by 20% in a year, it may just be seen as a mere statistic. The deeper story behind the company’s efforts, the strategies they employed, and the tangible impact of that 20% reduction on the environment remains untold.
Why is this a challenge?
The complexity of ESG metrics: Unlike traditional investment metrics such as P/E ratios or dividend yields, ESG data encompasses a myriad of aspects. It ranges from carbon emissions and water usage to workplace diversity and governance structures.
Lack of standardisation: Different companies and sectors may measure and report ESG metrics differently, leading to confusion and inconsistency for investors.
Limited context: A single data point, such as a 30% increase in a company’s community initiatives, may hold little significance without context. It is crucial to understand why it is important and what impact it has on the ground.
Emotional disconnect: Numbers alone do not evoke emotions. The human brain is wired to comprehend and remember stories, not isolated statistics.
As a real-life example, let’s take the case of Patagonia, the outdoor apparel brand. Instead of simply stating that they donate a certain percentage of profits to environmental causes, they go above and beyond. Through their marketing and communication channels, they share stories of the ecosystems they have protected, the communities they have empowered, and the tangible outcomes of their contributions.
The solution
To effectively transform ESG data into compelling narratives, fintech platforms and professionals should adopt a multifaceted approach:
Humanise the data: Behind each ESG metric lies a human or environmental story. For example, rather than just stating that a company has achieved 50% gender parity in leadership roles, it is important to highlight the stories of women who have achieved success, the company’s initiatives to promote diversity, and the broader impact of such diversity on decision-making and innovation.
Use visualisation tools: Infographics, interactive dashboards, and animated charts can breathe life into data. They provide instant context, comparisons, and trends, making it easier for investors to comprehend and grasp the information.
Standardise your reporting: By adopting universally recognised ESG reporting standards such as the Global Reporting Initiative (GRI) or the Sustainability Accounting Standards Board (SASB) guidelines, consistency and reliability can be brought to the presented data.
Educate and engage: Hosting webinars, creating explainer videos, or crafting insightful articles can help investors comprehend the intricacies of ESG metrics and their implications.
Here are some real-life examples to bring these ideas to life:
Interactive ESG scorecards: Imagine a fintech platform that offers interactive ESG scorecards, enabling users to delve deeper into each metric, compare it with industry peers, and visually track the company’s ESG progress over the years. For instance, an investor interested in a tech company can click on its ‘carbon neutrality’ score and access a breakdown of its carbon offset projects, complete with videos or images showcasing reforestation efforts or renewable energy installations.
Investor testimonials: Showcasing investor testimonials can be an effective tool. For instance, a testimonial video could feature an investor explaining why they chose to invest in a specific green bond or ESG-focused ETF, sharing their personal beliefs about climate change or social justice and connecting them to their investment choices.
Narrative-driven reports: Instead of presenting a generic ESG report, envision a format where each metric is introduced with a real-life story or case study. For example, under ‘Social Initiatives’, before presenting numbers on community investments, there could be a heart-warming story of a community member whose life was positively impacted by the company’s initiatives.
Wrapping up
The true magic lies in blending numbers with narratives. For fintech platforms aiming to cater to the modern, ESG-conscious investor, the challenge lies not only in presenting data but doing so in a manner that resonates, educates, and inspires. It is about crafting a story that intertwines profits with purpose, and data with human desires and planetary needs. The fintech sector possesses the tools and innovation required. It is time to script those compelling ESG stories.
About the author
Gihan Hyde is the award-winning communication specialist and founder of CommUnique, an ESG communication start-up.
She has been implementing ESG campaigns in eight sectors, across six countries over the past 20 years.
Her campaigns have positively impacted over 150,000 employees and 200,000 customers and have closed over £300m in investment deals. Some of the clients she has advised include The World Health Organisation (WHO), HSBC, Barclays, M&S, SUEZ, Grundfos, Philip Morris, USAID, and the Saudi Government.
Get in touch with Gihan through LinkedIn or X @gehanam.
