OPINION: The intersection of Environmental, Social, Governance (ESG) and brand trust

For the last five decades, Aziza has known only one way of life: the salty breeze of the Indian Ocean, the rhythmic sound of waves crashing against the shore, and the sight of fishermen casting their nets at dawn. Kilifi has been her home, a place where generations have thrived on fishing and tourism.

Her family, like many others, has depended on the ocean’s bounty, selling fresh fish at the local market, while tourists flock to the pristine beaches, bringing life to small businesses, from dhow operators to curio shop owners.

But now, all that is under threat.

Kenya’s first nuclear power plant, a 1,000MW, Ksh.500 billion project in Kilifi County, is facing strong opposition instead of celebration. While framed as a step toward energy security and industrialization, local communities, environmental groups, and political leaders are voicing concerns over environmental risks and a lack of stakeholder engagement.

The Nuclear Power and Energy Agency (NuPEA) is accused of inadequate feasibility studies and poor public consultations, leading to growing mistrust and resistance. As misinformation spreads, the project's future remains uncertain. This situation highlights a key ESG lesson: genuine stakeholder engagement is essential for building trust.

Stakeholders' expectations are shifting from passive interest to active demand through 2025. Investors, consumers, employees, and regulators are no longer satisfied with vague sustainability reports; they seek tangible, measurable, and socially responsible actions.

According to a 2024 PwC report, 82% of investors prefer companies with clear ESG commitments, reflecting a growing demand for meaningful and authentic ESG actions. A 2023 Nielsen survey also found that 66% of consumers are willing to pay more for sustainable brands, with Millennials (73%) and Gen Z (72%) leading this shift toward responsible corporate practices.

Additionally, 70% of employees, according to a 2024 Deloitte survey, are more engaged when their company's values align with their own on sustainability and social responsibility, and 59% of regulatory bodies, as highlighted by the 2024 KPMG Global ESG Survey, have or will soon mandate climate-related disclosures, compelling companies to demonstrate tangible action on ESG.

Organizations that fail to effectively engage stakeholders, whether in environmental projects, social responsibility initiatives, or governance reforms, risk reputation damage, regulatory backlash, and project failure. But those who do it well can build enduring trust, brand loyalty, and competitive advantage.

The "Social License to Operate (SLO) ” concept has emerged as a cornerstone of modern business strategy, reflecting a seismic shift in stakeholder expectations. Gone are the days when ESG commitments could be confined to glossy reports or aspirational rhetoric.

Stakeholders now demand radical transparency, measurable action, and authentic engagement in sustainability efforts. Organizations can no longer hide behind vague promises or jargon-laden statements; they must deliver clear, honest, real-time insights into their progress, challenges, and trade-offs.

Leading companies also leverage cutting-edge digital tools like interactive dashboards and real-time data-sharing platforms to enhance transparency and build trust. But technology alone is not enough. Genuine collaboration with affected communities, treating them as partners rather than passive stakeholders, is important for long-term success.

This is especially true in high-impact sectors like mining and infrastructure, where early and meaningful engagement can make or break a project.

The Uyombo nuclear power plant project in Kenya is a cautionary tale: failure to engage communities at the outset can spark resistance, derail progress, and erode public trust.

To build brand trust in 2025 and beyond, organizations must move away from performative ESG practices and embrace participatory ESG, where stakeholders are engaged early, meaningfully, and continuously.

Businesses must recognize that ESG is not just about compliance or public perception but about fostering genuine relationships with investors, employees, communities, and regulators to create sustainable and impactful change.

Successful ESG strategies begin with listening. Engaging stakeholders before making key decisions, rather than after, ensures that diverse perspectives are considered, potential risks are mitigated, and trust is built from the outset.

Research reveals companies that co-create solutions by involving communities, employees, and investors in ESG initiatives foster shared ownership and long-term commitment.

Measuring and reporting progress is also a key component that must not be overlooked. Data-driven ESG action, rather than vague promises, demonstrates accountability and drives continuous improvement.

Whether a nuclear power plant project in Kilifi or a multinational sustainability initiative, the underlying principle remains the same: stakeholder engagement is the currency of brand trust. As we move deeper into 2025, companies that embrace authentic, transparent, and inclusive ESG practices will mitigate risks and unlock long-term value and lasting impact.