ESG Is Now Essential to B2B Business Success in China

Today's business reality means that B2Bs must act on ESG and sustainability in China, or risk consequences.

WE Red Bridge has worked on ESG initiatives with Chinese clients for years, but until recently most clients’ ESG efforts, encompassing activations around sustainability, community outreach and more, were rarely clients’ top priority. Often included at the end of a brief, almost in passing, ESG initiatives typically had low buy-in and were usually the first to go during budget cuts.

Not so anymore.

ESG has come alive in the Chinese business community — and it will continue to grow in importance. B2Bs operating in China that once viewed it as a nice-to-have are now pointing to ESG as a must-have, a shift that better aligns them with consumer expectations around the world.

To understand more about how China’s B2B business community is thinking about ESG and sustainability in 2024 and beyond, WE Red Bridge surveyed 300 decision-makers from B2B enterprises operating in China about their organization’s ESG initiatives. Their responses clarify the centrality of these efforts to their businesses and indicate that they intend to ramp up these efforts in the coming years. We’ve developed a full set of findings illuminated by quotes from decision-makers at key B2Bs whose work has become more and more focused on sustainability, but here are the most important insights you need to know about this trend reshaping B2B communications in China:

Sustainability leads. Thirty-five percent of B2B respondents identify sustainability credentials and metrics as a top priority for the year ahead, but this number climbs to 50% when they were asked to think about the next 3 to 5 years. And only 1% of respondents said they will spend less in the year ahead on ESG programs, which includes sustainability.

Development is not evenly spread across all businesses. Bigger companies and some industries such as chemicals and manufacturing are more likely than others to see the benefits of ESG initiatives, with chemical companies, especially, indicating that ESG and sustainability can help with brand awareness (62%), differentiation (59%), customer acquisition (50%), and leads (56%). Likewise, larger companies were 10% more likely to say ESG programs can help with brand awareness (60% versus 50% for companies with 4,999 or fewer employees).

Transition: Given ESG’s importance in China, it is essential that brands think clearly about how to be successful. There is no universal approach, but as brands are considering ESG, we suggest the following:

1. Make sure your strategy is up to date. Seventy-four percent of respondents say that their customers are important or very important to selecting an ESG strategy, and government stakeholders are in second place with 69%. The public and employees followed, with 65% and 66%, respectively. In addition, customers, partners and investors are most likely to be identified as “very important” in selecting an ESG focus, while local government, global leadership and employees are more likely to be labeled merely “important.” With each group having specific expectations for B2B brands, it’s essential that the weighting for each is appropriately considered.
   
   
2. Consider how you are telling your story. B2B communicators identified social and digital channels such as social posts (43%) and short-form videos (42%) as the most effective channels for ESG communications. In addition, 56% of respondents indicate they plan to increase spending on short-form videos, 48% for social posts, and 40% for long-form video, as opposed to only 32% for events and 31% for in-person interviews. B2B companies are not immune to digital transformation in the communications space, and digital channels are coming out on top.

China’s ESG landscape is rapidly evolving, but it is clearly providing significant value to B2B enterprises across the country. As these businesses plan for the future, it is essential they have a considered strategy that will meet their needs for both the current moment and into the future.

Read the Brands in Motion 2023— ESG Means Business in China report or to learn more about our ESG-related offerings, visit us online at https://www.we-redbridge.com.