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If You Don’t Know What ESG Is By Now, You Better Find Out Quickly

Mar 16, 2022
Robert Koenen
Contributing Author
Robert Koenen
Contributing Author
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Environmental, social, and governance (ESG) is a movement that’s quickly becoming the best way to attract customers, investors and employees. If you’re not making it a major part of your core business culture, you’re already behind. Executives and board members are currently looking to incorporate ESG criteria and priorities into their companies for a number of beneficial reasons.  

Companies embracing ESG strategies will adhere to a set of standards for their overall culture and operations. Environmental criteria consider how a company performs as a steward of nature. Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.  

ESG is intended to incorporate a broad spectrum of methods to help people and our planet. But we’ll break it down into three simple ways to help your company get started on its ESG journey. 

Why is ESG so important to the C-suite?


Customers

More customers are buying products based on whether or not a company cares about employee welfare, environmental stewardship and social conscience. In fact, according to The Global Sustainability Study 2021, 85 percent of people indicate that they have shifted their purchase behavior towards being more sustainable in the past five years and 61 percent of consumers in the U.S. list sustainability as an important purchase criterion.

Investors

There was a time when fund managers would earmark a portion of their funds to “feel good” initiatives that “do the right thing.” Now, budgeting for ESG is an important annual investment and one that’s paying off. While some skeptics worry about failing to maximize returns, a report from S&P Global found that ESG exchange-traded funds and mutual funds with more than $250 million in assets actually outpaced the growth of those in the S&P 500 index from March 2020 to March 2021.

It makes sense, since customers are voting for ESG companies with their dollars, and ESG companies can attract and retain the best employees.

Employees

ESG issues are no longer an afterthought when it comes to corporate business strategy. Until recently, there was very little information available about how environmental, social, and governance impacts actual employees. 

In a few years from now, the millennial and Gen Z generations will account for over 72 percent of the total workforce and the competition for talent acquisition is as steep as it’s been in a long time. Every day, companies across the nation are facing unpredictable levels of employee turnover. And just as consumers are making purchasing decisions based on an organization’s environmental and social policies, they’re also deciding where to work based on them.

Big companies are already taking note. Nike was listed as one of the top ESG performers in the fashion, accessories and beauty sector between January-December 2021, according to GlobalData.

“We’re innovating to meet the challenges of climate change – designing products with circularity in mind, giving new life to worn footwear and apparel, and collaborating across the industry to reduce our collective footprint,” Nike CEO, John Donahoe, said in a recent letter.

Incorporating ESG into your organization’s strategy and company culture can help your employees feel like they are making an impact during their workweek.

If your company is exploring an ESG strategy–let us help you with the "E." More companies are switching to Boxed Water™ in order to avoid plastic bottles and aluminum cans.  

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