ESG is quickly becoming a standing topic in board rooms around the world. However, plenty of leadership teams remain on the sidelines when it comes to pulling the trigger on ESG adoption.
By Caitlin Markle
That puts a lot of pressure on team members fielding ESG questions from investors, vendors, customers, regulators, and other employees who want more disclosure, more often. If you’re trying to make a case for ESG in your company, start with these powerful statistics your Board will be hard-pressed to ignore.
ESG Investments Will Grow To One-Third Of Global AUM By 2025
We’ve all heard about the staggering growth in ESG over the last few years - and the numbers don’t lie. ESG-oriented investments are on track to make up one-third of the projected $140.5 trillion in assets under management by 2025. ESG investments reached $21 billion in the first quarter of 2021 alone, compared to the inflow of $51 billion in all of 2020.
What’s driving the mad rush for ESG? Demand, politics, changing priorities, and more attractive risk-adjusted returns are all noted factors accelerating the ESG landscape. Which is why institutions - big and small - are implementing ESG considerations into their investing decisions. For example, BlackRock is urging organizations to report in alignment with TCFD and SASB to demonstrate how they are considering and preparing for environmental, social, and governance risks.
Shareholders are a critical stakeholder group to consider when making a case for ESG at your company. As demand for ESG investments continues to rise, so will their engagement.
59% of Businesses Are Already Seeing Revenue Growth From ESG Activities
Understandably, your Board will want to know the return on ESG investment - and we have it. According to a Deloitte study, 59% of organizations that have already adopted ESG efforts see a positive top-line impact, and more than half see a positive effect on profitability.
But it doesn’t stop there. ESG efforts are netting cost savings within the business as well. For example, 3M has saved more than $2 billion with its Pollution Prevention Pays (3P) Program, and PepsiCo saved $375 million in resource conservation and waste reduction efforts.
With your Board on board with ESG, you can collectively set organizational KPIs, like cost savings, revenue growth, etc., to underscore the value of your program.
76% of Consumers Will Discontinue Business With Companies that Treat the Environment or
Communities Poorly
If your business isn’t already getting sustainability-focused questions from consumers, it’s only a matter of time when it will. Consumers are becoming more alert to the ESG mandate and, as a result, are starting to base buying decisions on a company’s ESG efforts.
PWC recently found that 76% of consumers are ready to discontinue their business with organizations that do not support the environment, employees, or local communities. And, consumers want companies to do more across all ESG components, such as diversity and inclusion, data privacy and security, and product quality.
93% of Employees Believe Companies Must Lead With Purpose
Finally, your Board needs to understand how employee satisfaction, retention, and turnover are becoming more and more interconnected with the company’s ESG principles. In fact, 93% of employees believe companies must lead with purpose, and 69% say they won’t work for a company without a solid purpose.
Employees seeking alignment with values and purpose with their employer is a result spurred by the global pandemic. And that value alignment is proving to enhance employee motivation, productivity, and loyalty – which couldn’t be more important in the middle of a national labor shortage.
The case for ESG is pretty solid, but we understand that some leadership teams aren’t fully bought in on the opportunity. But, they need to be aware that investors, employees, and customers are already looking at what the company does or doesn’t do when it comes to ESG – regardless of whether they believe in it. Now’s the time to take advantage of the cash on the table and build better relationships with top stakeholders.
Need help getting ESG buy-in at your company? At Global Imprint, we know ESG is more important now than ever and are ready to help you reach your Board members where they are. Reach out to us today to start a conversation!