Companies engage in ESG issues, otherwise they will lose customers

A recent investigation conducted in Colombia, the United Kingdom, the United States, Australia, Italy, Hong Kong, Singapore, the United Arab Emirates, Germany, France, Poland and Spain warned business leaders of the need to take action on environmental, social and good governance issues (ESG, for the English abbreviation for environmental, social and governance) or otherwise, Their lack of efforts, work and silence may lead to the loss of clients for their companies.

During the third annual report of ESG monitoring is carried out by SEC NewgateThe global strategic communications, reputation management and research group has revealed a sharp rise in society’s interest in environmental, social and governance (ESG) issues despite economic concerns affecting the cost of living for millions of people.

The research suggests that a tipping point has been reached, meaning that the need for companies to take real action to address the impacts they are having on people and the planet can no longer be questioned. Some of the key findings included the following points:

• 67% rated their interest in environmental, social and governance issues as 7 or higher out of 10, compared to 56% in 2022.
• 77% of respondents agreed that it is important for companies to take action on environmental, social and governance issues.
• 71% of participants agreed that companies should speak publicly about issues important to their employees and customers.

In this regard, Fiorenzo Tagliabue, CEO of SEC Newgate Group, said: “We know that some companies prefer not to advertise their business due to fears of being accused of being ‘woke’ (a term that in English means ‘woke’), but it is used as an expression of insult or Flattery for pointing out progressive policies). The clear trend we see in the first two reports, and confirmed in the ESG 2023 report, is that people care deeply about and expect companies to demonstrate leadership in achieving positive environmental and social outcomes for their business operations.

“The public wants action and companies to talk about what they are doing,” Newgate, the SEC CEO, added. They believe that being a CEO means acting like a leader and that avoiding voicing an opinion on issues important to their customers and employees is no longer an option.

The study shows some important differences by generation, with Millennials more likely to consider environmental and social issues in their decisions.

For example, when it comes to the investments they choose, 57% of Millennials consider environmental, social responsibility and governance (ESG) issues to be an importance of 7 or higher on a scale of 10, while only 47% of Baby Boomers share this view. . When it comes to evaluating a job with a new employer, 58% of Millennials rate ESG issues as an importance of 7 or higher, in contrast to the 39% of Baby Boomers who do.

Optimistically, the survey results revealed that society believes that companies in most industries and countries are responding and taking necessary action.

However, there remains a lack of confidence as to whether companies are fully committed to addressing the issues involved. Participants criticize companies for their environmental mismanagement, including excessive use of plastic and exploitation of workers. They also point out that some companies prioritize excessive profits at the expense of the well-being of customers and society. Moreover, they criticize the slow shift towards more sustainable practices.

Participants noted that they want to see companies show real effort, even if they don’t do it perfectly from the beginning, and to think about how they can increase their impact by collaborating with other organizations and empowering community members. They would prefer that companies integrate these issues into the way they operate rather than impose additional costs on them:

• 69% of respondents agreed that companies can be profitable while performing well on environmental, social and governance issues.
• 64% of respondents agreed that companies should not pass on the cost of better ESG performance to their customers.

The research also revealed that nearly 7 in 10 consumers worldwide (68%) agree that companies need to communicate the results of their ESG efforts more clearly to consumers and investors, and a similar proportion (69%) show a strong interest in this. the information. They are presented consistently, perhaps to make them easier to understand.

Despite their marked interest in issues relating to social and environmental issues, only 6% of people claim to regularly seek out information or investigate a company’s activities or performance in these aspects. In addition, 89% of respondents indicated that they do not trust, or at least have doubts about, the veracity of companies’ claims about their activities or performance in these areas.

“It is clear that an effective strategy is critical to reputation these days,” said Sue Vercoe, managing director of research at SEC Newgate and partner at SEC Newgate Australia. “Consumers expect real responsibility from companies and financial pressures related to the cost of living are not impacting those expectations.”

The public also believes that governments could do more to introduce and enforce better regulation of environmental marketing (70% agreed), which would help ensure a level playing field.

However, some countries were less concerned with government intervention than others. Colombia (79%) and Italy (75%) topped the list of countries whose residents believe their governments could implement more regulations to support environmental, social and governance issues, while this number fell to 56% in Germany.

In other findings from ESG monitoring research:

• Globally, the top three “most important” problems are:
• Addressing the high cost of living (37% ranked it as one of the top three issues).
• Ensuring high-quality, affordable health care for all (30%).
• Strengthening the economy (25%).
• Millennials were more optimistic about their country’s future than baby boomers.