What is ESG?

Environmental, Social, and Governance (ESG) refers to the three central factors in measuring the sustainability and ethical impact of an investment in a business or company. ESG criteria provide a set of standards for a company’s operations that socially conscious investors use to screen potential investments.

Environmental criteria examine how a company performs as a steward of nature.
Social criteria examine how the company manages relationships with employees, suppliers, customers, and the communities where it operates.
Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.

ESG Compliance and Sales: The Connection

1. Meeting Consumer Demand

With the rise of environmentally-conscious consumers, ESG compliance has become an important factor in the purchasing decision. A 2020 survey by NYU Stern’s Center for Sustainable Business found that sales of products marketed as sustainable grew 7 times faster than those that were not.

2. Attracting and Retaining Talent

A robust ESG framework helps in attracting a passionate workforce. Companies with better ESG ratings tend to have more satisfied employees, which can directly impact sales. A Gallup study highlighted that companies with a highly engaged workforce experience a 20% increase in sales.

3. Risk Management

Companies that adhere to ESG standards are better equipped to manage reputational risks, ensuring a steady sales performance. The Volkswagen emissions scandal in 2015 is an example where neglecting ESG standards led to a sharp 13.7% drop in global car sales.

ESG Compliance in Action: FMCG Example

PureGreens Ltd. — A small to medium-sized enterprise in the Fast-Moving Consumer Goods (FMCG) sector, specializing in organic skincare and personal care products.

Environmental — PureGreens adopted eco-friendly packaging solutions, ensuring that 95% of their product packaging was either compostable or recyclable. They also collaborated with local farmers for sourcing organic ingredients, thus reducing carbon emissions associated with transportation.
Social — The brand initiated a “Buy One, Plant One” campaign. For every product sold, PureGreens committed to planting a tree in deforested areas. This not only helped in offsetting their carbon footprint but also resonated strongly with their eco-conscious customer base.
Governance — PureGreens established a robust feedback mechanism where customers could directly voice concerns or suggestions. They also ensured gender parity across their leadership roles, promoting a culture of inclusiveness.

Within 12 months of implementing these ESG measures, PureGreens witnessed a 30% increase in sales. Furthermore, they garnered a loyal customer base that not only repeatedly purchased their products but also served as brand ambassadors, further propelling their sales and enhancing their reputation in the FMCG sector.

SME of any kind can implement ESG. To further amplify the benefit of ESG implementation, SME can advertise their effort subtly to their end-user trough smart method.

Gratitude can help!

Gratitude enables businesses to become transparent by being powered by blockchain technology, with easy-to-use tools to record their supply chain, narrate the story, verify on blockchain and present the data in a beautiful landing page that can be issued via Gratitude’s QR Code or URL that can be placed on a physical product or embedded on digital marketing campaign or label, even in hotels. With this QR code, brands can put in place localized material or descriptions of their product so that the product can quickly hit the shelves while the full localization in progress. Customers can then simply scan the QR codes placed on the product or click the link on a digital campaign and clearly see the product’s journey, verify sustainability claims, or even company and brand stories that the company wants to reveal to the customer in language that they are familiar with.

Begin your business’ true transparency journey by implementing Gratitude to unlock the hidden value of your supply chain data. Talk to our representatives via the following channels for support or assistance in implementation:

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