B2B messaging on ESG in China needs to be local, customer-focused, and relevant to resonate: WE Red Bridge report

A recently launched report from WE Red Bridge titled ‘ESG means business in China’ has revealed that the importance of ESG in making a purchase decision is on the rise for B2B companies in China, driven by the demands of their customers, which is leading to an uptick in spends around communicating sustainability initiatives. 

After an eventful year of post-Covid recovery in China, the report — part of WE Communications’ ongoing Brands in Motion research — aims to track changes in thinking about ESG strategies. Tony Zhang, general manager (Beijing) and head of corporate at WE Red Bridge said, “We have a long history of working with B2B companies in China. We designed and ran this survey to understand these shifts in greater detail.”

For 50% of B2B businesses operating in China, ESG has emerged as one of the top considerations influencing purchase decisions by their customers, pointing to the growing importance of sustainability linked themes.

Customers were further identified as the top stakeholder for sustainability and ESG programmes by 74% of respondents.

A staggering 99% say that they will spend the same amount or more communicating their sustainability initiatives this year compared to the last — with 60% indicating that their spending is set to rise.

The research reveals the essential role played by ESG in the shaping of corporate reputation for many B2B brands in China.

‘ESG means business in China’ covers companies across five sectors: manufacturing and distribution; energy, utilities, oil, and gas; automotive and aviation technology; chemicals; technology, IT, automation, electronics. WE Red Bridge also spoke to marketing and communications decision makers to gain greater clarity on their strategy.

The report reveals not just the extent to which companies in China are prioritising ESG, but also draws attention to strategies that are shaping a company’s approach to this increasingly critical aspect of business.

ESG is no longer optional

While digital transformation and AI are key priorities in the near term, ESG is soon expected to take centre stage.

In China, environmental sustainability is the most popular area of ESG focus, followed by stakeholder-related groups such as employees and community building.

Asked how companies could quickly get up to speed on ESG-related themes, Zhang said, “Brands must take stock of their current ESG-related actions, and the narratives that are being built around them. ESG is a fast-developing sector, and customers’ demands can change over time. Actions that might have held water five or six years ago may not meet the needs of today.”

MNCs need to highlight their ability to solve local problems facing the China market

Activations local to China are critical for multinational B2B companies. Several stakeholders in China still view the market as developing and believe that they should directly benefit from ESG initiatives. Activating locally is the only way to reach these stakeholders. Zhang said, “Activations in far-off regions such as the Amazon rainforest or villages in Africa will not provide much reputational benefit for Chinese consumers or government stakeholders.”

Media choice matters

WE Red Bridge’s research has also highlighted the importance of specific mediums while communicating initiatives around sustainability. Zhang said, “Our respondents rate social activations and video as the top channels for ESG-related content. Marketers should think about how they are telling their stories to ensure that they are reaching the right audiences.”

Asked for the most important takeaway from the report, Zhang said, “With all the topics it encompasses, ESG is now a must-have for B2B businesses looking to succeed. But ESG is also a fluid concept, and popular understanding of what it means has changed and will likely continue to evolve. It is more important than ever that brands continue to explore, regularly look at their ESG activations and how they tell those stories to create agile, responsive systems that meet the needs of their customers both today and into the future.”

For the complete report and more information on strategies to be deployed for an effective ESG programme for B2B companies in China, visit the official website.