In the fast pace growth of conscious consumerism and sustainability practices for corporate companies, there are enough acronyms to fill a bowl of alphabet soup…CDP, LEED, GHG, DJSI, KPI...We could keep going but then you’d need headache meds from OTC (over the counter).
But, there's one that's so important, we're going to spell it out for you — ESG. If you don’t know what ESG is by now, you’re already behind, so let’s catch you up, ASAP!
Environmental, Social, and Governance (ESG) is a movement that’s become the best way to attract consumers, investors, and employees. Sustainability driven organizations are making ESG a core part of their business strategy and culture by adhering to a set of standards across each platform:
ENVIRONMENTAL
Are we stewards of the environment and planet?
A high flying example of Environmental stewardship is Alaska Airlines. They've committed to reducing the company’s carbon footprint to net zero by 2040 and have taken considerable steps in reducing on-board waste, especially single use plastics. Boxed Water is proud to be a key partner in this initiative as the only on board water option resulting in the elimination of millions of plastic bottles from our oceans.
SOCIAL
How do we manage relationships with employees, vendors, consumers, and communities?
Netflix is a leader in social activism. The streaming giant has pledged $100 million in investments with external organizations to help marginalized communities in the film and entertainment industry. The company also uses an “open compensation” policy to help fight pay gaps between employees, as well as offering inclusive benefits for transgender and nonbinary employees.
Learn more about Netflix’s ESG commitments…
GOVERNANCE
How do we manage leadership, compensation, and shareholders?
Nike’s commitment to corporate Governance is well over the finish line.
Their "Governance" includes strategies regarding sustainability, diversity, equity, and inclusion, social and community impact, corporate responsibility, and human rights. They believe their success is the result of their people and they go the distance in making sure they are committed to being the best.
For more on Nike’s commitment to Governance, click here.
So why is ESG so important to YOUR business strategy?
Your consumers are choosing to buy products from companies who care about the environment and operate with a social conscience. According to a recent study, 85 percent of consumers have shifted purchase behavior towards more sustainable products and 61 percent have indicated that sustainability is an important purchase consideration.
Budgeting for ESG is an important annual strategy that is paying off. So much so, that companies ESG specific funds doubled in 2019 (during a pandemic year).
ESG companies can attract and retain the best employees. 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.
So now that you know what ESG means and why it’s so important…What are you waiting for? Better get started, because, well you know…YOLO.