Saturday, March 25, 2023

What should companies know about consumer ESG issues?

Recent research has shown that environmental, social and government links are more justified as factors contributing to corporate profitability. Things that benefit people and the planet, as well as bringing benefits to society’s bottom line.

However, perhaps the most difficult part in this context is to understand what ESG concerns about consumers are so that companies can pursue sustainability in their plans and communicate genuine results that generate greater loyalty and advantages in the market.

Determining the ESG concern

Companies have been found to have products that demonstrate excellent environmental and socially responsible experiences and sales growth, a cumulative average of 28% over the past five years, compared to 20% for products that do not make such claims, according to a recent study. by global consultancy McKinsey.

However, companies can identify some ESG strategies that are easier to achieve and measure the right results, such as cost reduction. But above all, efforts in ESG should focus on consumer concerns, be an alternative through tools that allow the collection of data in real time so that companies can make more informed decisions about where to invest their resources and how to communicate achievements in key areas. .

Glow, a research technology company with offices in North America, Europe and Asia-Pacific, began tracking consumer questions about ESG in relation to purchasing decisions two years ago.

Starting with a field of about 40 questions that – through multiple researches in three markets (US, UK and Australia) -13 key factors influencing the issuing of acquisition decisions in relation to environmental, social and governance (ESG) issues, this process was achieved. a diagnostic tool called the Social Security Score (SRS).

Group performance in terms of consumer ESG

The Social Responsibility Score (SRS) is a tool that not only provides a number to indicate how a company is perceived in its ESG efforts, but also where it stands in its industry and against its competitors and why users rate it that way.

For example, among Food & Grocery companies there are mainly three environmental drivers: reducing emissions, protecting natural resources, and protecting wildlife and ecosystems, for the most important, consumers.

This is not to say that social ESG factors such as health and wellness are not important to customers in the F&G sector. But understanding the top concerns of consumers at any given time can help companies prioritize, based on the success of their programming and communication strategy. Sharing achievements in the countries where the products are most used can translate into greater service for the company and the creation of loyal customers.

However, if a brand and its competitors share everything about themselves, it can be more difficult to stand out. In these cases, the brand may want to focus on an area that is not as important to peers and competitors.

ESG factors differ across industries

ESG pain, as we have said, concerns differ across industries. For example, Glow found that government and social leaders are the biggest influences on ESG credentials in the US health insurance industry.

While in the travel and tourism industry, US customers see all three aspects of environmental, social and governance as important to speak for the sector. In a balanced framework like this, it’s vital to dig deep into age, gender, geography and brand competition to avoid focusing your programs and message and spreading your investment and resources too thinly.

That’s why the pain always needs some help. Price and quality are often the driving forces behind consumer decisions, but business leaders may be surprised at how strong “sustainability” has become.

This is especially true in the F&G sector, where 1 in 2 US consumers have switched brands based on sustainability considerations, and 1 in 5 cite ESG/sustainability as one of the top three drivers in deciding which brands to buy, according to Glouce data. .

Finally, the findings demonstrate the importance of companies that address ESG consumer concerns in their sustainability strategies for business profitability. Failing to listen and respond to consumers in this matter gives profit and reputation to competitors who want to use their feedback.

Nation World News Desk
Nation World News Desk
Nation World News is the fastest emerging news website covering all the latest news, world’s top stories, science news entertainment sports cricket’s latest discoveries, new technology gadgets, politics news, and more.
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