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Increasing business value with ESG

by Sam Baldwin

17 May 2024

Integrating ESG practices into your business model can unlock a wide variety of benefits including reducing costs and growing your business.

Over the past few months, we have been highlighting some of the key benefits a solid ESG proposition can bring to your business.

In this article, we wanted to deep-dive into two specifically: cost reduction and top-line growth. Some are more likely to arise in certain industries or sectors. Although, others will be more frequent in given geographies. However, to drive the most value from your ESG agenda, we suggest considering both.

Continue reading to discover more. If you want a snapshot of your company’s ESG agenda and insight into how to improve – take our quiz below.

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Cost Reductions

Many people are surprised to hear that implementing ESG initiatives isn’t just about saving the planet. It’s about saving money too.

ESG initiatives can significantly reduce costs by combatting rising operating expenses, such as raw-material costs and the true cost of water or carbon. This can affect operational costs by up to a huge 60% (McKinsey).

For instance, FedEx aims to convert its entire 35,000-vehicle fleet to electric or hybrid engines; to date, 20% have been converted, reducing fuel consumption by more than 50 million gallons.

Essentially, companies excelling in sustainability strategies tend to perform better financially.

 

Top Line Growth

A solid ESG proposition can provide a strategic advantage for SMEs looking to grow.

Customers are willing to pay a premium for greener, more sustainable products. Decisionmakers from a variety of industries surveyed said they would pay an additional 5% for a green product, if it met the same performance standards as a non-green alternative.

For example, when FMCG giant, Unilever developed Sunlight, a brand of dishwashing liquid that used much less water than its other brands, sales of Sunlight and Unilever’s other water-saving products proceeded to outpace category growth by more than 20% in a number of water-scarce markets.

 

Securing Future Success: The Imperative of Integrating ESG Practices

Regardless of your industry or location, integrating ESG practices into your business model can unlock a wide variety of benefits, from cost savings to revenue growth and enhanced team performance. Embracing ESG isn’t just about doing the right thing, it’s about securing your company’s future success in a rapidly changing world.

Need a helping hand with your business’ approach to ESG? Take the first step in creating a successful ESG agenda by taking our free 2-minute starter quiz.

 

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