No Match Found
Consumer-facing companies have been embedding aspects of environmental, social and governance (ESG) considerations into their businesses for several years now; however, their approach has typically been siloed, in response to specific issues.
Today, in the wake of a global pandemic and a parallel social justice movement — compounded by geopolitical conflict — customers, investors, regulators, employees, supply chain partners and society as a whole are increasingly asking, and sometimes demanding, that consumer markets (CM) companies make ESG a priority.
Our experience at PwC illustrates that four key areas constitute a holistic approach:
CM leaders are responding to ESG demands by broadening their perspective, adding purpose to their overall mission — a goal that has evolved to encompass environmental topics and diversity, equity and inclusion (DEI). Purpose-led businesses are also expanding their target audience from mostly shareholders to a wider range of stakeholders: customers, investors, regulators, employees, supply chain partners and society as a whole.
Regulatory pressures are also hastening business adoption of ESG initiatives. In March 2022, the Securities and Exchange Commission (SEC) gave initial approval to the climate disclosure rule that requires all public companies to include certain climate-related disclosures in their audited financial statements.
As a result of these efforts, ESG has begun transforming the way CM companies operate. The benefits to society are obvious (including a more livable and diverse planet). However, benefits also accrue to companies with a robust ESG strategy: from growth and cost reduction to risk and reputation management.
Consumers are an important cohort urging CM companies to support ESG strategies. Many businesses are paying close attention to their customers so they can better understand and respond to their concerns and desires.
Employees have also grown increasingly vocal about wanting their employers to be more proactive in their ESG efforts. They said they would be more likely to work for companies with robust ESG strategies.
"I will discontinue my relationship with companies that treat the environment, employees or the community in which they operate poorly"
As a result of the rapidly changing perspective on the importance of ESG, CM leaders now clearly understand the importance of responding equitably to your stakeholders, which, in turn, can help nurture a trusted brand. Use the following framework to help deploy your ESG program:
As increasing numbers of consumer markets companies begin tackling ESG concerns, they will need to develop a robust strategy that treats ESG not just as a challenge to be met, but also as an opportunity to create value for their stakeholders — thus enabling them to become ESG advocates for the greater good.