Keeping sight of greener pastures
Our recent series of articles has looked at how businesses can best navigate the choppy waters of the current cost-of-living crisis; last month we touched on the benefits of adopting Agile principles to navigate the rapidly changing consumer environment.
Whilst the immediacy of these challenges will undoubtedly be the focus for most businesses in the coming months, in the long run, it is critical that short-term fire-fighting does not eclipse the business purpose and the key pillars of their long term strategy.
ESG as table stakes
Environmental, social and governance (ESG) issues are firmly moving up the agenda for both consumers and investors alike. It’s no secret that businesses are increasingly feeling pressure to set and meet ESG related targets. As such, developing initiatives that both chime with the brand proposition and have genuine impact has become a business fundamental. In the long run, businesses that want to survive have little to no choice over whether or not to strive to improve the ways they manage their impact on the world. Legislation that ties businesses to ESG commitments is already in place the UK, Australia and Germany and it’s only a matter of time before other countries follow suit.
Greenwashing simply does not wash
But it is not easy! Consumers are becoming more and more switched on to the issues at stake, and they are looking for impactful and genuine actions from companies that are not just marketing tactics. Anything less generates a negative backlash with damaging outcomes – for example, a lawsuit was filed against H&M, accusing it of ‘greenwashing’ by misleadingly labelling the sustainability of its products. It is clear that both regulators and consumers expect genuine progress against ESG goals.
Customer understanding as the key to lasting impact
Understandably, implementing ESG strategies come at a cost – for businesses but also consumers. Shifting the dial on ESG ratings often requires a consumer to make different choices and genuinely ethical and sustainable products can come with a higher price tag. This puts businesses in a difficult position, particularly at a time when the cost of living is on the rise. The case for investment in genuine and impactful ESG initiatives can be difficult to make when consumers may not be able or prepared to share the financial burden of doing so. As a result, businesses will need to consider an approach to implementing more ethical and sustainable practices that either aligns with current consumer preferences and behaviours or helps to change these.
Consider an approach to implementing more ethical and sustainable practices that either aligns with current consumer preferences and behaviours or helps to change these.
At Incite, we believe that human understanding is key to transforming businesses for the better. We have recently launched a whitepaper that takes a deeper look into the role of ESG factors in the relationship between people and businesses, and the critical action points for ESG decision-making in the context of strategy development, to help businesses align themselves with what consumers really want and to a mutually beneficially conclusion. Download it here.
To learn more about how Incite can support your business in adopting a more consumer-centric approach to ESG decision making, please get in touch.