Benefits of ESG Strategy for Business.
1. Creates a Competitive Advantage
An ESG program boosts your brand, and promotes customer loyalty.
80% of consumers would pay more for sustainably produced or sourced goods - PwC's "Voice of the Consumer Survey, 2024".
71% of the IT professionals believe their companies would pay over a 5% price premium for IT products from the vendors having strong ESG practices - TechTarget's April 2024 survey.
2. Attracts Investors
Investors are increasingly drawn to companies that prioritize ESG and transparently share sustainability metrics. Such companies often secure better investment terms.
77% of global investors are interested in sustainable investing - Morgan Stanley survey, 2024.
When Covid-19 hit in 2020, ESG investments out-performed traditional ones - BlackRock.
With growing public concerns about climate change and natural resource misuse, investors now use ESG as a critical screening tool to avoid companies that harm the environment and society.
3. Improves Financial Performance (Top-line and Bottom-line)
A strong ESG strategy attracts customers, opens doors to new markets, and addresses pressing issues like climate change, etc.
Simple sustainability efforts i.e. going paperless, recycling/reducing raw material waste, and opting for energy-efficient upgrades, lowers energy bills (costs) and improving bottom line.
Staying ESG-compliant reduces risks and shields your brand from penalties, reputation harm, thereby enhancing overall profitability.
Executing an ESG strategy effectively can reduce operating costs by up to 60% - McKinsey.
4. Builds Customers & Employees Loyalty
A robust ESG strategy not only builds customer loyalty but also attracts and retains talent, boosting productivity and reducing hiring costs.
46% of consumers prefer to by (environment-friendly and/or recyclable) sustainable products, with many willing to pay up to 9.7% extra for brands that share their values - PwC survey.
Companies adhering to ESG principles can now easily attract and retain more customers, by clearly communicating their ESG efforts.
Socially conscious consumers, particularly Gen Z, favor organizations that treat employees and communities well.
5. Makes Operations Sustainable
Integrating ESG principles into your core operations uncovers cost-saving opportunities—lower energy consumption, reduced waste, and overall operational efficiency.
Exemplary ESG Initiatives by a Few Indian Companies
For SMEs, ESG adoption levels the playing field, enabling them to compete with larger organizations by strengthening connections with customers, employees, and stakeholders.
Summary:
ESG programs drive competitive advantage, attract investors, enhance financial performance, build loyalty among customers and employees, and ensure sustainable operations.
Struggling to Raise Funding? Click here for expert assistance!
Comments