ESG: Environmental, Social, Governance. To some, that may just be a mouthful of empty promises and subjectivity, but to others, it dictates a company’s moral standards.
As ESG surfaces as an attractive corporate concept across industries, it’s crucial to understand its emergence– Society is rapidly progressing towards a more environmentally conscious mindset. In order to embrace the shift in perception while maintaining a competitive edge, corporate America has taken action by altering its focus towards sustainability and diversity initiatives one small step at a time.
But what does SUSTAINABLE ACTION really look like?
In a world that increasingly emphasizes the importance of societal impact, it is imperative that ESG-focused initiatives align with consumers’ core values. Not only should such initiatives synchronously reflect societal beliefs through public messaging but more notably, through promoting such ideals with responsible business practices while actively avoiding greenwashing. Forbes contributor, Greg Petro, expertly articulates this notion with his belief that “being authentic is not so easy and those which market around sustainability without backing it up run the significant risk of alienating consumers with messages that come across as self-serving” (Forbes, 2021).
Too often, ESG initiatives are designed to boost revenue and brand appeal, ignoring the demand for actual societal change. When companies solely focus on profit-oriented messaging and fail to realize their overarching influence on environmental action, they neglect opportunities to build trusting relationships with consumers through aligning with shareholder values. Furthermore, the long-term impact of sustainable business practices may be equally as impactful to a company’s profit margin as ESG-related marketing through gradual cost reductions, in addition to offering higher stock returns due to investor interest in ESG.
Perhaps ‘sustainable action’ can be defined as any initiative that meets the needs of the present without compromising the ability of the future to meet its needs. Authentic sustainable action is demonstrated when companies promote ESG by recognizing the urgency behind ethical action and craft deliberate behaviors, such as reducing carbon footprints and combating climate change within corporate practice. Through these strategies, businesses can increase their chances at longevity, better promote their product, and add value to society.
Consumers Don’t Buy Products, They Buy Stories
One company that has emerged as a leader within the environmental scope by embracing the ‘ESG Gold Standard’ is Apple. Apple has an ESG focused landing page which showcases the company’s awareness and dedication to sustainable development. It proudly displays their successful environmentally-conscious initiative to remain carbon neutral in corporate operations since 2020, in addition to its ambitions to create carbon neutral products by 2030. The company’s broad strides have set a precedent for others to follow and have contributed to their strong consumer following.
Social conversation indicates Apple’s actions are not going unrecognized. Apple CEO, Tim Cook, took to Twitter to showcase Apple’s pledge and strides towards carbon neutrality. The post received high engagement as many praised Cook for his ESG leadership, and depicts how the company is truly taking action to guide global sustainable development. In response to Tim Cook’s tweet, consumers communicated their appreciation of Apple’s ESG progress and influence as trailblazers. Also noteworthy was that this milestone was conveyed through CEO Cook himself rather than Apple’s corporate account, creating a more personable connotation that resonated with customers. This case study serves as an example of how Apple’s transparent efforts contributed to building loyalty and credibility among its consumer base.
How ESG Influences My Perspective Through the Lens of Analytics
While at Ringer Sciences, my passion for ESG has been further invigorated. I have had the opportunity to collaborate on several ESG-oriented projects and lend my unique perspective to provide rich insights. Fordham’s Gabelli School of Business has provided me with a sound understanding of ESG as both a consumer and a leader. Fordham places heavy emphasis on integrating ‘business with a purpose’ into the classroom and was ranked #1 in ESG Responsibility by Bloomberg Businessweek Corporate.
Fusing my education on ESG visibility with my work at Ringer Sciences has been nothing short of rewarding. One of my favorite projects to date would be my work on a pitch for a client that provides benchmarks for companies' social impact. Through the analysis, we found that when financial firms incorporate sustainability into their core values, risk is sequentially mitigated; However, the more a company posts about ESG matters does not equate to the quality of their ESG awareness. They must be authentic in their delivery to elicit the best results. Consumers trust more in ESG-focused firms which inturn influence their financial decisions. Specifically, we found that strong positive online sentiment was driven by corporate efforts advocating for gender and racial diversity, leading us to recommend that companies follow suit by bolstering their in-house initiatives that ladder up to these topical pillars.
In the current economy, ESG is essential for businesses. But to me, corporate sustainability boils down to a simple implication: It demonstrates that businesses are led by individuals just like you and me. Sometimes it’s difficult to conceptualize that there are faces behind the scenes of monumental business decisions, however, when ESG is at the forefront, these decisions become more personable. I appreciate that companies are prioritizing what genuinely matters by painting a holistic image, guiding future generations for boundless success and prosperity. Knowing that ESG is impending with such magnitude is reassuring as I soon enter the real-world.
ESG provides a great lens for analytical thinking. The innovative nature of ESG initiatives constantly provokes my mind and encourages me to do better however I am capable of it in my own bubble. My exposure to ESG-focused projects at Ringer opened my eyes to how important this phenomenon truly is. Having the opportunity to dive deeper into the perceptions of ESG in online conversations broadened my awareness of the magnitude that ESG holds in today’s society, beyond the scope of profitability. Through practicing analytics, I further cultivated my learnings about the strong
correlations between consumerism and ESG-focused reputations,
and the role it plays in corporate America today.