Emphasizing sustainability has become essential for small and large enterprises. Here’s a guide to creating a favorable influence.
The pressures experienced in recent years have underscored the urgency of sustainability in ways previously unprecedented. Consumers are urging all types of brands, ranging from small enterprises to large corporations, to evaluate their influence on the world and find a harmony between sustainability and profits.
According to a recent EY Future Consumer Index Survey, over 60% of consumers are now monitoring the environmental repercussions of their consumption choices, and 69% expect brands to take the lead in resolving sustainability challenges. Younger shoppers, particularly Millennials, place substantial emphasis on values-driven shopping, with 63% showing willingness to pay extra for eco-friendly products.
In order to meet these evolving consumer expectations, businesses need to adopt ESG principles: a set of standards that assess the Environmental and Social impact of a business, in addition to its Governance structure. This approach aims to promote ethical and sustainable business practices.
In the following discussion, we will explain what ESG is and explain the advantages to businesses, plus outline strategies for integrating sustainability at the core of your brand.
What is ESG?
ESG is a set of standards investors, regulators and consumers use to measure the environmental and social impact of a brand.
Environmental issues take into account the business’ impact on the planet, and initiatives may include reducing waste, lowering greenhouse gas emissions and reducing pollution.
Social issues concern matters of fairness and inclusivity and initiatives may focus on fair and equitable compensation, speaking out on social issues and improving diversity within the business.
Governance standards ensure ethical operations within the company and prioritize transparent interactions with consumers and other stakeholders.
Collectively, ESG standards assist businesses in embracing a more comprehensive perception of “success” — one that emphasizes the triple bottom line encompassing people, planet, and profit.
Why is ESG important?
In addition to the evident ethical advantages, maintaining a focus on your ESG commitments provides numerous benefits that position businesses for success:
Opportunities for funding and financing
Lenders, funding institutions, and investors are all actively searching for businesses that prioritize ESG practices, with a noteworthy 94% of indicating the inclusion of ESG factors in their investment approach. Embracing sustainability may help your business attract like-minded investors who share similar values and secure funding or financing for your business.
Enhanced innovation
The shift towards sustainability introduces new ways of doing business — along with novel challenges that customers anticipate brands to solve. Businesses that can meet these evolving demands not only resonate with similar-minded consumers, but leverage sustainability as a key differentiator to capture a larger portion of the market.
Competition for talent
Highly skilled individuals gravitate towards employers who prioritize ESG initiatives, and almost 40% of Gen Z and Millennial workers have turned down job offers or assignments that didn’t align with their personal values. Consequently, emphasizing your dedication to social and environmental concerns may help you attract the talent you need.
Financial advantages
Going greener can have a direct positive impact on your business’s bottom line. Adopting energy-efficient alternatives can lower utility costs, and implementing waste reduction measures can lead to cost savings.
How can businesses embrace ESG?
Accelerate your journey to greater sustainability with these strategies:
- Fostering a more equitable and diverse workforce: Look for opportunities to promote equity within your organization. Ensure you’re following diversity, equity and inclusion best practices for hiring, and set standards for fair treatment and compensation within your business.
- Contributing to the communities you serve: Engage with your local community and support social initiatives. Identify ways to support your community. This might involve partnerships with non-profits, supporting employee volunteer efforts, allocating a portion of your earnings to a charitable cause, committing to plant a tree for every sale, or providing donations to those who are less fortunate.
- Making ESG part of your brand mission: The journey to greater sustainability is a long one, and your brand narrative and mission should reflect your long-term commitment to ESG. Create a Brand Values page on your site Develop a Brand Values section on your website to to communicate your progress toward your goals and share your wins and to highlight your achievements throughout this journey.
Remember that embracing ESG is a continuous journey. Businesses can start with manageable steps and gradually expand their efforts as they learn and grow.
