Does your business have a strong ESG (Environmental, Social, Governance) Proposition?
If you do, your customers will pay more, your regulators will be more lenient, and your employees will be more productive – all resulting in greater value and profits -- for your company.
E – Environmental Criteria: The energy, waste and resources you use, and the consequences it has on the world.
S – Social Criteria: Your reputation and relationships in the community.
G – Governance Criteria: Your internal system of governing practices, making effective decisions, complying with the law, and meeting the needs of external stakeholders.
ESG links to cash flow in five (5) important ways:
#1 – Facilitating Top-line Growth
Choose: Gaining more B2B and B2C clients by having more sustainable products over losing customers through poor sustainability practices
Financial Benefit: Customers are willing to pay up to 5% more (across industries) for businesses who offer green products.
#2 – Reducing Costs
Choose: Lower energy consumption and water intake reduction over generating unnecessary waste (cue higher costs) and higher packaging costs.
Financial Benefit: Reducing costs can surprisingly affect your operating profits by as much as 60%.
#3 – Minimizing Regulatory & Legal Interventions
Choose: Greater strategic freedom through deregulation and earning subsidies and government support over suffering advertising restrictions, fines and penalties.
Financial Benefit: Currently, 1/3rd of companies are at risk for state intervention. Moreover, this could negatively impact your profits from 25-60% (varies by industry).
#4 – Increasing Employee Productivity
Choose: Employee satisfaction (which has a positive correlation with shareholder returns and generating higher stock returns) over “social stigma” and weak purpose.
Financial Benefit: Companies that made Fortune’s “100 Best Companies to Work For” list generated 2.3-3.8% higher stock returns per year than their peers.
#5 – Optimizing Investment and Capital Expenditures
Choose: Long-term thinking and sustainability over falling behind competitors that do have a strong ESG proposition.
Financial Benefit: Providing solutions for sustainability may offer new opportunities for you to enhance investment returns.
Do you have a strong ESG proposition?
About The CMO Syndicate
The CMO Syndicate is a diverse group of world-class Chief Marketing Officers who rapidly solve growth and profit problems for CEOs, VCs, CMOs, and PE firms. As global CMOs from the world’s top companies, The CMO Syndicate is not a traditional marketing consulting agency, and we are not typical marketing or growth consultants. We are growth experts and operators who actually do the work on a part-time or project basis as outsourced fractional and interim CMOs.