The SEC Opens a Door. Communicators Should Step In

Corporate communicators have a chance to extend their influence over messaging on the environment thanks to their new friend Gary Gensler.

Gensler is the chairman of the U.S. Securities and Exchange Commission, whose new rules on climate change will force many companies to tighten up the accuracy of their public statements.

The changes, adopted by the SEC on March 6, 2024, will help communicators tell stories of great interest to employees, customers and media using the tools of thorough reporting, data analysis and storytelling, which we call brand journalism.

There’s no better way to learn how to use these tools than by reading. To inspire you, we have selected four stories taken from leading business publications. These examples show how your stories can complement the investor relations folks who likely will be gathering climate-change information.

“Some companies’ sustainability teams aren’t used to the level of regulatory scrutiny that financial-reporting personnel are, but both teams will need to jointly own climate data under the new rules,” The Wall Street Journal reported last week, citing an executive with a business-reporting software company.

Too often, corporate communications about the environment have been on a seesaw. Marketing and PR spin sit at one end with a big pile of numbers in a convoluted sustainability report on the other.

“The real starting point for me is transparency — meaningful transparency,” Aurelia Figueroa, global director of sustainability for Swiss watchmaker Breitling, told The New York Times in November. “In some sustainability reports, across all industries, I notice data dumps, where it’s like, ‘Here’s a ton of information. We have 500 factories around the world; this is how much energy they’re using.’ OK, thank you, but how am I supposed to digest this? Can you just tell me about the carbon in addition to the energy?”

The regulations, proposed last year, are scheduled to be phased in over time, starting with fiscal year 2025 for large publicly traded companies. But first they’ll be run through the wringer of litigation.

Corporate communicators shouldn’t wait for all that. Here are four climate-change stories to get you moving. We quote from the stories to give you the flavor, but they deserve to be read from top to bottom.

1. Innovation. Readers have been interested in stories about new technology since the invention of the hammerstone 2.6 million years ago. Here’s a recent example:

The New Hot Climate Investment Is Heat Itself
Batteries that store heat can replace fossil fuels for steelmaking and other industrial processes
The Wall Street Journal
Feb. 22, 2024
Industrial companies are searching for ways to make steel, cement and chemicals without burning fossil fuels. Some of the world’s biggest investors are betting a fast-developing battery that stores heat can solve the problem.
BlackRock, Saudi Aramco and Rio Tinto RIO headline a group of financiers pouring hundreds of millions of dollars into startups making heat batteries. Also called thermal batteries, they use renewable energy to heat up blocks, rocks or molten salt. That heat is released on demand to power industrial processes.
Using electricity to generate heat is nothing new. That is how toasters work. The difference is that these toasters are roughly the size of shipping containers and release steam as hot as 2,750 degrees Fahrenheit, more than a quarter of the sun’s surface temperature. The trick is keeping the batteries hot until the heat is needed.

Here’s what to like about this story:

• The wordplay in the hed: “hot” and “heat.”
• That’s followed by the irony of the lede: “without burning” but storing heat. “Betting” suggests risk, a point of tension. What if the bet is wrong?
• The second graph explains why the reader should care. Names are news, and big names in investing “hundreds of millions of dollars.” Readers care about big numbers and there’s another big one in the third graph, 2,750 degrees. That’s a lot.
• A simple explanation and a simile, “That’s how toasters work.”
• The last sentence, about “the trick,” explains why this is risky.

2. Beating targets. A little tension spiced up what’s usually a boring story: a company exceeding its goals to reduce greenhouse gas emissions.

Nokia Brings Forward Net Zero Target by 10 Years to 2040
New goal puts it ahead of the Paris Agreement and brings the company’s ambitions in line with key competitor Ericsson
The Wall Street Journal
Feb. 26, 2024
Nokia committed to reducing its total global greenhouse gas emissions to net zero by 2040, accelerating its previous target by 10 years, it said.
The new target puts it ahead of the Paris Agreement target of net zero by 2050 and brings the company’s ambitions in line with key competitor Ericsson.
The Finnish network gear maker said it is continuing to improve the energy efficiency of its products through technology, with newer chips allowing networks to run on less power, while advances in material technology will help recycling efforts and less packaging will lower transport weight.

Here’s what to like:

• Nokia later in the story recognizes it faces “challenges in decarbonizing its shipping fleet,” which is a crucial part of reducing so-called Scope 3 emissions.
• With its new goal, the company has caught up with a key competitor, Ericsson.
• The competition gives the story credibility with readers, even if marketers and PR types would blanch at the mention of a competitor.
• Nokia could make a similar point without mentioning Ericsson. While Nokia’s new goal is 2040, that’s still later than 61% of the mobile phone industry, which has set 2030 as the goal.

3. The explainer. Readers want to understand complex topics, and explainer stories can satisfy that need. Choose a topic that relates to your business and explain it without selling any product or service. To demonstrate, here’s the lede and questions from a recent story.

Record-Smashing Heat in the World’s Oceans, Explained
Bloomberg
March 4, 2024
A surge in the temperature of the world’s oceans is continuing into 2024. What’s behind the unprecedented readings, and what do they mean for people, wildlife and the wider climate?

1. 1. Just how high are these temperatures?
   2. Why are the oceans getting warmer?
   3. What do warmer waters mean for wildlife and the fishing industry?
   4. What’s going on in different regions?
   5. What’s next for ocean temperatures?

Here’s what to like:

• A straightforward lede that poses the questions to be answered.
• Plenty of plain language, such as this explanation to the question, “Why?” Since the 1980s, ocean waters have absorbed roughly a quarter of our carbon dioxide pollution.
• The tone is very matter of fact, even though the story paints a grim picture.
• A graphic demonstrates the trend of rising temperatures.

4. Profile. Not enough corporate communication about sustainability focuses on people, whether it’s a shop foreman, an environmental engineer or an executive. Here’s a profile about a woman who seems to have been born for her job. She helped create an Environmental, Social and Governance index used by investment firms.

Private Equity’s Green Star Started It All with a Database
Bloomberg
March 4, 2024
Meg Starr grew up in a Cape Cod home her dad had built by hand. The electricity came from solar panels, the water was drawn from a well in the backyard, and three compost bins supported the gardens and the chickens. Every Sunday, she split logs to fuel the fire.
“My parents make incredible choices at the most micro level,” Starr says. “I just grew up assuming that everyone made those decisions, because they were the rational decision to leave the world the same as, if not slightly better than, how we found it.” Only later did she realize that “it’s a privilege to live that way.”
Starr now sits in a very privileged place, as a high-level partner at Carlyle Group Inc., where she’s pushing the private equity giant and its rivals into an industrywide experiment in sustainability.

What’s to like:

• The story traces her persistent effort to create the index starting in 2020.
• You hear her voice throughout.
• Numbers help tell the tale but are used sparingly.
• There’s tension in the story, with criticism of the index, which she answers.

Less hype and more fact-based reporting on climate change will avoid trouble with regulators, but that’s not the reason to do it. Employees, customers, investors and the public generally expect companies to fix it. Some folks just stress economic aspects, as Gallup reported this month.

All the more reason to tell the stories straight.

Tom Corfman is the director of sustainability for his household and admits he could do a better job. He’s also a senior consultant with Ragan Consulting Group, where he leads the ESG practice.

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