The rise of ESG, long may she reign
Ubuntu Thoughts / 5 Min read
Environmentalism. Climate Change. Sustainability. Planet-first. Greenwashing. [Insert green-first jargon here].
Chances are, over the past year you’ve been bombarded with your fair share of news stories championing some kind of social cause, else been subject to email spam from businesses touting “let’s-change-the-world-for-good” corporate BS. That’s all thanks to the ballooning desire for brands new and old to be seen to have some kind of formalised green credentials in place.
And surely that’s good though, right?
Well, in principle yes. In reality, however, it’s more complex than sticking a “Dolphin friendly” label on your food can and saying you’re the next Greta.
Cast back over the past few years, and it’s pretty clear that consumer demand (particularly in the West) has dictated the need for greater transparency from the companies in whom we trust our hard-earned disposable income. From toothbrushes to technology to trout (apparently fish really are friends, if not always food), we’ve eked towards a societal norm where “power to the people” really can dictate the rise and fall of boardrooms – watch out Zuckerberg. Steer too close to the iceberg of anti-inclusivity or the shallows of modern-day slavery and a brand can find themselves front-page news. (And no, not all good publicity is good publicity).
And this is seemingly more than just a nice thought and no action. Consumers are seemingly voting with their feet and spend – a 2019 survey found that 81% of consumers globally expect companies to be environmentally aware in all their advertising and communications, and will openly switch to alternative brands if they can. Younger generations are taking the lead, with over six out of ten under thirties closely consider a company’s ethical values and authenticity before buying their products, but increases in consumer consciousness can be seen across virtually all demographic groups.
Naturally, this has a knock-on effect for brands who want to still be around in 5 years time (or perhaps even sooner). As consumers become increasingly precious about the impact of hot-topic issues, the pressure is on businesses to be proactive in their social responsibility and transparent in their practices.
Where they need to tread carefully however, is falling foul of the CSR days of old. Investing in a genuine ESG strategy is about more than just meeting a fad or appeasing consumers. Whereas bolt-on “green” side projects have previously ticked the proverbial box for many brands, consumers today have become increasingly savvy in their ability to exert pressure for perceived “inauthenticity”, “unethical” or “harmful” behaviours. Whether true consumer loyalty exists remains a debated topic for marketing scholars, however there is no doubt that perceived loyalty still plays a part in whether a customer becomes a long-term consumer or simply shops elsewhere. Either way, this ultimately negatively affects sales and therefore the bottom line.
So, what’s the good news here? Well, it’s not all doom and gloom. Studies have found that companies who recognise the importance of adapting to changing socio-economic and environmental conditions are better able to identify strategic opportunities and meet competitive challenges. In other words, being able to adapt quickly will prove very useful for “future-proofing” the companies of the future.
Prioritising ESG initiatives has also been found to strengthen business-customer relationships and build greater brand authority. For example, a large part of delicious ice-cream giant Ben & Jerrys’ success comes from their promotion of the consistent “green” collaborations they do with activists and charities.
As q4blog.com puts it: “there are plenty of reasons why doing good can lead to doing well financially: investments in energy efficiency can save money; philanthropic programs can motivate staff; community outreach can aid recruitment”.
Pair this with the fact that we’re witnessing the largest inter-generational transfer of wealth (with the more socially conscious millennial population wielding roughly $24 US trillion), the fact is that ESG is likely here to stay, so it’s time to do better.
Chances are, over the past year you’ve been bombarded with your fair share of news stories championing some kind of social cause, else been subject to email spam from businesses touting “let’s-change-the-world-for-good” corporate BS. That’s all thanks to the ballooning desire for brands new and old to be seen to have some kind of formalised green credentials in place.
And surely that’s good though, right?
Well, in principle yes. In reality, however, it’s more complex than sticking a “Dolphin friendly” label on your food can and saying you’re the next Greta.
Cast back over the past few years, and it’s pretty clear that consumer demand (particularly in the West) has dictated the need for greater transparency from the companies in whom we trust our hard-earned disposable income. From toothbrushes to technology to trout (apparently fish really are friends, if not always food), we’ve eked towards a societal norm where “power to the people” really can dictate the rise and fall of boardrooms – watch out Zuckerberg. Steer too close to the iceberg of anti-inclusivity or the shallows of modern-day slavery and a brand can find themselves front-page news. (And no, not all good publicity is good publicity).
And this is seemingly more than just a nice thought and no action. Consumers are seemingly voting with their feet and spend – a 2019 survey found that 81% of consumers globally expect companies to be environmentally aware in all their advertising and communications, and will openly switch to alternative brands if they can. Younger generations are taking the lead, with over six out of ten under thirties closely consider a company’s ethical values and authenticity before buying their products, but increases in consumer consciousness can be seen across virtually all demographic groups.
Naturally, this has a knock-on effect for brands who want to still be around in 5 years time (or perhaps even sooner). As consumers become increasingly precious about the impact of hot-topic issues, the pressure is on businesses to be proactive in their social responsibility and transparent in their practices.
Where they need to tread carefully however, is falling foul of the CSR days of old. Investing in a genuine ESG strategy is about more than just meeting a fad or appeasing consumers. Whereas bolt-on “green” side projects have previously ticked the proverbial box for many brands, consumers today have become increasingly savvy in their ability to exert pressure for perceived “inauthenticity”, “unethical” or “harmful” behaviours. Whether true consumer loyalty exists remains a debated topic for marketing scholars, however there is no doubt that perceived loyalty still plays a part in whether a customer becomes a long-term consumer or simply shops elsewhere. Either way, this ultimately negatively affects sales and therefore the bottom line.
So, what’s the good news here? Well, it’s not all doom and gloom. Studies have found that companies who recognise the importance of adapting to changing socio-economic and environmental conditions are better able to identify strategic opportunities and meet competitive challenges. In other words, being able to adapt quickly will prove very useful for “future-proofing” the companies of the future.
Prioritising ESG initiatives has also been found to strengthen business-customer relationships and build greater brand authority. For example, a large part of delicious ice-cream giant Ben & Jerrys’ success comes from their promotion of the consistent “green” collaborations they do with activists and charities.
As q4blog.com puts it: “there are plenty of reasons why doing good can lead to doing well financially: investments in energy efficiency can save money; philanthropic programs can motivate staff; community outreach can aid recruitment”.
Pair this with the fact that we’re witnessing the largest inter-generational transfer of wealth (with the more socially conscious millennial population wielding roughly $24 US trillion), the fact is that ESG is likely here to stay, so it’s time to do better.
Start as you mean to go on
We’re all pretty digital-native now, so it goes without saying that you’re going to get Googled at some point. In two minutes, any scandalous details such as poor supply chain practices, worker conditions and pay, or detrimental impacts on the wider environment are going to be exposed. What’s more, companies like Good On You are cropping up to help make it easier for consumers to pick out the leaders from the liars – so it’s in everyone’s interest for transparency to become the norm over the exception.
So where do you start? Here are our top four tips to get you moving:
So where do you start? Here are our top four tips to get you moving:
1// It all starts with a plan
We can all have ideas, but they typically fall by the way-side without a plan in place – look no further than your new year resolutions to see how winging it really works out. By setting clear objectives with SMART goals to achieve them, you can begin to take the right steps towards achieving a more sustainable business. More to come on that in future weeks.
2// Don’t set it and forget it
No progress will ever be made without regular reviews. Many companies fall down when they address ESG as a one-time thing. Revisit your goals like any other business objective and assess whether it’s truly helping you to grow – or in fact, acting as a red-herring.
3// Know your partners like your own mother
The reality we live in is that even when you’re doing everything perfectly, someone else may not be. Assessing whether your partners meet your standards is a big YES from us. No-one wants to do business with people who don’t think the same – and the same is true for who consumers buy from, just look at the rise of influencers.
4// When you’ve got it, shout about it
In our opinion, there’s nothing wrong with being proud of what you’ve achieved. Let your consumers (and the press, we love you media moguls really) know that you take the impact your company has on the environment and wider communities seriously. We live in a wonderful world with 101 different channels to do this – from social media, to blogs and articles, to video content. The world’s your proverbial oyster (just don’t forget to make sure they’re sustainably farmed too).
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We're not your average, run-of-the-mill creative agency. We were founded and built on a passion for helping companies do better - for themselves, for people, and for the planet.
We appreciate that all life on earth is under threat, so we’re using the resources we have—our business, our investments, our voice and our imaginations—to do something about it. Reducing the negative impact on people and the planet.
If you're looking to make a change in how you market your business, we'd love to chat. Find out more at ubuntustudio.co.uk.
We appreciate that all life on earth is under threat, so we’re using the resources we have—our business, our investments, our voice and our imaginations—to do something about it. Reducing the negative impact on people and the planet.
If you're looking to make a change in how you market your business, we'd love to chat. Find out more at ubuntustudio.co.uk.
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