ESG is the hottest topic of conversation in today’s boardrooms. To uncover the true impact of ESG, we spoke to business leaders to inquire about their company’s ESG efforts and how they’re shaping strategies across their organization. Concurrently, we contacted consumers across the USA to discuss the role ESG plays in their purchase decision-making. After speaking to 1,100 participants as part of this research effort, we have reached an incontrovertible conclusion: ESG has transcended trend status.
80% of US companies are taking efforts to minimize their environmental impact and/or to promote equity in the workplace. Furthermore, 41% report that HR departments are helping lead their ESG revolution. Corporate leadership continues to rely on HR to initiate unprecedented organizational change by tackling diversity, equity and inclusion (DEI). The conclusion is clear; HR will continue to play a vital role driving company success even as the pandemic recedes. But can they continue to be successful? Only if they take the right approach. More than 90% of Millennials and GenZ, agree that a company’s ESG position significantly influences where they choose to work now and will also continue to influence this decision in the future. With many US companies facing a skilled labor shortage, HR’s prioritization of not just ESG policies, but the right ESG policies, will provide a much-needed strategic advantage as companies compete to hire the best and brightest new talent.
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While US shoppers still care about traditional influencers such as price and availability, they are paying closer attention to ESG, with 80% declaring it a purchase consideration now, and it is expected to continue to be an influence 5 years from now. What remains to be seen is whether ESG will become a determinant equal to price in shoppers’ decision-making process. It appears that the level of future long-term success that a company achieves will be influenced by which of their ESG efforts they choose to promote. This decision shouldn’t be made lightly. Companies like Nike have chosen to promote diversity and equity, while Apple has targeted waste reduction. Are these the right decisions? Time will tell. What is highly likely is that ten years from now, many in the C-suite will look back at their ESG-related decisions as some of their most important of the last decade. That is why the strategy behind embracing ESG needs to be carefully considered. Before making a decision, an organization needs to be fully informed so that it can consider all possible options and potential impacts before choosing wisely.
