Social Responsibility
How ESG can improve a brand and attract customers
September 2022
Much has been written already about environmental, social, and corporate governance (ESG). While businesses are starting to see the value of ESG, many are still in the early stages of their journey to understanding how ESG can help in a practical sense. While trying to understand ESG as a subject, businesses are also trying to work out what environmental, social, and governance actions they should be focusing on.
In the following piece, Business World hears from Tony Carey, managing director of Russell Bedford’s Dublin member firm, Cooney Carey, on how ESG can be leveraged to improve a brand and attract customers.
In the course of our work Cooney Carey found that businesses are keen to find out how to implement ESG into specific areas and plans of action. At the same time, business leaders need to ensure that any effort and investment that goes into ESG creates value for all stakeholders – employees, customers local communities, and shareholders alike.
All this raises important questions. So we partnered with strategic advisers, Genesis, to conduct research into understanding how ESG can drive business performance. Genesis has experience in understanding ESG as a force, how it can drive business performance, and what elements have the biggest impact on brand equity and consumer behaviour.
The research objectives
The research consisted of a targeted survey of a representative group of one-thousand Irish adults with a wide range of ESG attitudes, motivations, and perceptions. The research sought to:
· Identify the ESG activities that have the most impact on brand reputation and consumer purchasing preference
· Segment Irish adults psychographically to show how they think about and engage with ESG
· Ascertain how Irish adults perceive any progress and momentum around ESG
The survey also asked respondents to consider the performance of a range of well-known businesses operating across seven different sectors, specifically:
· energy suppliers
· supermarkets
· banking
· automotive
· mobile, broadband, and television
· state-owned commercial enterprises (semi-state agencies)
· Big Tech
This has given us a measure of how consumers perceive the ESG performance of these well-known brands and how they stack up against their peers.
Summary of findings
Perhaps unsurprisingly the research shows that businesses that focus on ESG experience an enhanced reputation and more favourable consumer buying behaviour. But the research findings go deeper than this: they identify the ESG activities and corporate behaviours that have the most impact on consumer thinking and perceptions. They fall under five headings.
Fair and ring-fenced profit – consumers expect businesses to pay their fair share of tax on profits. They also expect to see businesses ring-fencing a quantifiable share of profits to support good causes and improve the pay and benefits of employees.
Fair treatment of suppliers and communities – consumers not only expect businesses to treat their suppliers fairly, they also expect them to support the local communities in which they operate.
Maintain a fair and inclusive workplace – employers must treat its employees well, while also promoting and supporting diversity and inclusion in the workplace.
Build an organisational ESG culture – businesses and their leaders and employees must be sincere about wanting to do business in a way that is more ethical, principled, and sustainable.
Take real and practical actions and interventions – consumers expect to see businesses making real changes to reduce their carbon footprint. They also want businesses to offer options and solutions that make it easier for customers to make climate-friendly and sustainable choices.
Conclusions
The research has produced some direction and clarity around those ESG activities and behaviours that drive a healthy brand identity and enhanced consumer purchase preferences. Above all, the research shows there is a developing and overarching consumer need for a visibly authentic and honest approach to how businesses conduct themselves in the ESG arena. Those businesses that focus on ESG, and actually mean it and build it into their business culture, will be the businesses that attract consumers.
This article doesn’t try to explain the detailed research and findings, it can only give an overview. However, this detail is freely available to anyone who wants to find out more, just send an email to Mark Nolan at Genesis using mnolan@genesis.ie.
About the author
Tony Carey
Dublin, Ireland
Tony is the managing director of Russell Bedford’s Dublin member firm, Cooney Carey. He has over 35 years’ experience in corporate finance and business advisory services and has owned and managed various businesses in the commercial sector.
Within Cooney Carey, Tony’s clients particularly value his straight-talking, can-do attitude. At times of crisis, they know they can rely on him to stick with them and get the job done. He is committed to helping all his clients succeed.
arcarey@cooneycarey.ie