QSR September 2022

DEPARTMENT CLIMATE RESPONSIBILITY

TheROI of ESG Data experts weigh in on the relationship between customers and brand responsibility. B Y R A C H E L P I T T M A N

T here is no single, clear-cut strategy for brands to address all environmental, social, and governance ( ESG ) issues. ESG has always been crucial for brands to con sider—and is perhaps more relevant than ever in the current moment—but the plethora of areas that it encompasses can make develop ing a solid plan for addressing ESG a murky, overwhelming process. But at its core, ESG is about consumer trust. While the label applies to a number of concerns from employee well ness, to community involvement, to sustainable operations, it is most closely associated with how customers perceive brands. “[With ESG we look at] themes and topics around the environment, social issues, gover nance, and general trust—those come together to form a brand’s purpose,” says Bradley Taylor, senior strategist with Converseon, a conver sation intelligence company that analyzes consumer conversation using artif icial intel ligence ( AI ). “And what jumps out to us about ESG in the industry is that there is a lack of trust in general, for [quick-serve] restaurants.” Since the beginning of 2021, Converseon has used its AI technology to monitor and

Coming out of the pandemic, consumers have begun to reset their expectations.

assess conversations surrounding customer experiences with sev eral brands, including over a dozen quick-service chains, across social media channels, producing a report with its findings at the end of each quarter. Using a proprietary consumer memory metric, Converseon’s technology filters social media posts and reproduces survey-like results by incorporating consumer “memory” ( lasting perceptions of an experience with a brand ) into the rather imme diate comments sourced from social platforms. While online comments vary widely in subject and tone, Converseon’s tech nology is able to extract clearly def ined topics and themes from unstructured feedback. The company’s recent data gathered around quick-serve brands is broken into specific ESG categories—environmental responsibil ity, customer experience, social responsibility, corporate citizenship, and trust—and then split into further, more specific areas of interest for targeted brand feedback. Converseon has used the data to pro duce a heatmap showing areas of immediate attention for brands. A score for each brand in each category is produced from data and then placed along a scale from negative 100 to plus 100 (and red

to green); Taylor reports lower scores for customer perception of quick-service brands’ social justice efforts than for environmen tal initiatives. “The industry as a whole is actually doing very well when it comes to sustainability, recycling, pollution, and reducing emissions,” he says. “We can contrast that with social issues—layoffs, support of the LGBTQ community, anti-racism—that’s where the industry really struggles. That is really where the struggle is happening, where peo ple are shouting about it, where people are disappointed and upset with the industry, but in terms of the environment, there is progress.” Still, while brands’ efforts surrounding social issues might gar ner less satisfaction than those same companies’ approaches to sustainability, the environment still holds the most potential for loss (or gain) of revenues. For quick-service brands in particular, Converseon finds that environmental practices typically generate or detract the most from revenues (about $140 million per quar ter) with social justice causes detracting or adding around $110 million per quarter. This indicates a key area for concepts look ing to develop more robust ESG strategies or improve customer

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