ESG: A Game-Changer for Your Business
In recent years, there’s been a growing emphasis on the adoption of environmental, social, and governance (ESG) principles as an expectation of the private sector. As we’ve previously explored in the context of Corporate Social Responsibility, companies that embrace ESG principles are seeing significant benefits in terms of revenue growth and improved customer retention.
A recently released study by Moore Intelligence highlights this fact, outlining the strong correlation between the implementation of ESG initiatives and business success. We’ve summarized the key findings from the report below so you can understand the positive impacts that adopting an ESG plan can have on your business and your relationships with your customers.
What are ESG principles?
ESG principles are based on addressing issues under three key pillars:
- Environmental issues, such as climate change, pollution, and resource depletion;
- Social issues, such as human rights, labor standards, and community relations; and,
- Governance factors, including board composition, executive compensation, and shareholder rights
In the study, Moore Intelligence identified opportunities for businesses to create fundamental change within their operations by adopting ESG principles, meeting their ESG goals and becoming more transparent about social responsibility requirements.
ESG builds your bottom line
The study, which spanned eight major economies, identified how ESG initiatives are potentially game-changing for businesses that have faced the impacts of Covid, supply chain disruption, an energy crisis and chronic staff shortages. Companies that wholeheartedly embraced their ESG goals experienced:
- Revenue growth: Ambitious mid-sized companies that prioritized ESG witnessed a 9.1% jump in revenue over the past three years, and a revenue increase of $3.1 trillion collectively over the past four years. In the post-Covid era, these businesses are recognizing that sustainability and profitability can go hand in hand.
- Untapped potential: The study found that if all companies in the study had embraced ESG principles to the same extent as the most committed advocates, the total revenue uplift could have been $3.8 trillion, equating to an average increase of $39 million per company.
Improved customer retention and perception
Beyond the immediate financial benefits, companies surveyed in the report experienced a significantly improved relationship with their customers through a boost in retention and brand perception. Key findings in this area include:
- Growing expectations around ESG: The study showed a significant shift in the perception of ESG principles among businesses—84% of surveyed companies stated that ESG principles have grown in importance for their organization from 2019 to 2023.
- Enhanced customer retention: 79% of businesses surveyed that have increased their emphasis on ESG principles reported an improvement in customer retention. This stands in contrast to only 47% of other organizations.
- Polished brand image: 81% of these ESG-focused businesses reported an improved brand image, compared to only 49% of other companies. This positive brand perception can pay dividends in greater trust and loyalty among customers.
The ESG advantage
Embracing ESG principles isn’t just a matter of corporate responsibility; it’s a strategy that drives financial growth, customer retention and brand image enhancement. As Anton Colella, Moore Global CEO, aptly puts it, “businesses that serve the greater good of helping society, protecting the environment, and conducting themselves with good governance have a clear advantage over competitors who do not.”
The future of successful business lies in the integration of ESG principles, so reach out to your DMCL advisor and they’ll work with you to identify opportunities for taking your business’s environmental, social and governance initiatives to the next level. To learn more about the key findings of the report, click the button below.
DMCL is an independent member of Moore North America Inc., which is associated with the Moore Global Network Limited. To learn more about the Network, visit www.moore-global.com.