When it comes to explaining the benefits of its products, asset management can learn a lot from other industries. This is particularly true for ESG investing. There is rising demand for responsible investments, but many asset managers’ ESG marketing has been little more than ‘green washing’;
vague and unsubstantiated claims that have led to a lack of understanding and trust. Fortunately, there is an industry close at hand that does things much better – veganism. In this article, we highlight its rising popularity and explore three potential lessons for the marketing of ESG investments.
The rise of veganism
Supermarkets, restaurants and fast food chains are all looking for a slice of the vegan pie. This could be dismissed as ‘just another food trend’ but doing so would arguably ignore the reasons for its rising popularity, such as dietary requirements, nutritional and health benefits, and ethical and environmental impact. It is the concept of sustainable living and understanding how the things we eat affect our environment that makes veganism bigger than just a food fad.
Veganism is part of a growing movement where consumers look for products and services that don’t just meet personal needs, they have a positive impact on the world. You can see the rising interest in this area from twitter conversations, google searches and retail sales.
- Between January 2016 and July 2019, there was a 113% increase in twitter conversations around ethical and sustainable shopping (Source: Twitter, Tweet volumes geo-filtered by US market, Q2/19 vs. Q1/16)
- Since January 2018, there has been a 350% increase in Google searches for BlackRock sustainable investing (Source: Google trends global search terms 01/01/2018 – 07/01/20)
- NYU Stern’s Center for Sustainable Business found that 50% of the growth in consumer-packaged goods between 2013 to 2018 came from sustainability-marketed products (Source: New Sustainable Market Share Index, March 2019)
The increasing popularity of a vegan lifestyle has undoubtedly been helped by the way it is marketed. We think there are three key lessons for asset management firms:
1. Counter negative myths with positive facts
Negative stories have suggested that vegan food lacks the necessary protein for a healthy diet. To counteract these messages, there has been lots of content from experts and health gurus, vegan recipes and messages on vegan-food packaging all highlighting that it is high in protein.
Asset managers can use this holistic and always-on approach to marketing to counter any ‘green washing’ perceptions. They can do this by creating a range of communications that engage investors across channels and at every stage of the investor journey. These can show the importance of integrating ESG criteria into an asset manager’s investment process to manage risk more effectively and achieve sustainable returns for their clients.
2. Make people feel like they are having a positive difference
Vegan food hasn’t just gained traction from making people feel happier about eating healthier. It also makes them feel good about the positive impact they are having on the planet.
Asset managers can make investors feel good about ESG investing by focusing on the positive impact their investments have had on the environment and society. They could use case studies to show how asset managers work with companies to make them more sustainable or highlight positive impact reports that quantify how much carbon emissions have been reduced by investor money.
3. Positive messages don’t just come from companies
People trust people more than companies. Influencers have helped to spread the positive message of a vegan diet, which in turn drives demand for vegan food.
Asset managers can use social listening tools to identify influencers and then provide them with investment stories around the positive impact that ESG investing has on communities, the environment and the world we live in, such as plastic reduction or protecting endangered species from palm oil production.
To conclude, there is one broader point that the asset management industry can take from the rise of veganism. Investors clearly care about sustainability and they could have a stronger affinity with companies that integrate it into their brand and product story.