Leading companies are increasingly focusing on environmental and social issues and the positive impact they can have on their business and stakeholders. Environmental, social and governance (ESG) initiatives are now increasingly seen as an opportunity rather than a liability.
In a survey conducted by Bain & Company, a global strategic consulting firm, more than 85% of business leaders said social issues are a pressing concern for their companies. The survey of 300 business leaders also found that 39% believe that balancing the needs of all stakeholders is the primary role of business.
The study found that consumers are truly invested in the social aspects of the products and services they spend their money on. For example, 82% of consumers in the Middle East, Europe, and Africa are more likely to recommend a company they find supports a social cause.
In Latin America, 86% of consumers believe that companies should contribute to the betterment of society. The majority of consumers surveyed feel positively about companies that value diversity, inclusion, and human rights.
It’s not just consumer expectations that are driving companies to comply with a relatively new set of social and environmental standards. For example, in the EU, companies are required to comply with a set of regulations aimed at ensuring respect for human rights in the supply chain, among other environmental regulations. EU legislation targeting products linked to deforestation lies at the intersection of both social and environmental concerns.
According to a Bain & Company report, companies with stronger social principles are reaping the benefits, outperforming their peers in a variety of categories, including revenue, growth, customer attraction, financing, and attracting new talent. Leading.
An important (but often overlooked) element of a responsible social agenda is a focus on human resources. Investing in training, whether it’s reskilling or upskilling, can make a big difference, especially in industries like energy, where the transition to sustainability will bring big changes to the workforce.
Setting ESG goals is becoming increasingly important in business practices, reflecting growing awareness of the economic and ethical implications of sustainability. But in this movement for responsible practices, organizations need to weary of “greenwashing” that imposes a superficial appearance over a true commitment to meaningful ESG initiatives.
Previous research has shown that around 80% of European business leaders are concerned about the environment. No doubt this concern is shared by many consumers and shareholders alike.