Introduction
In today's fast-paced and constantly evolving business world, companies must prioritize the social and environmental impact of their actions. This is where Environmental, Social, and Governance (ESG) comes in.
In recent years, Environmental, Social, and Governance (ESG) initiatives have gained immense traction as businesses are willing to maximize profits but also operate in a sustainable and responsible manner.
ESG helps companies to not only achieve financial success but to also create long-lasting positive change for people and the planet. The benefits of adopting ESG practices are clear, with numerous studies showing that companies with strong ESG performance outperform their peers in both financial and operational metrics.
The following case study highlights the impact and success of ESG in companies, using real-life examples and data-driven insights to illustrate the importance of adopting these practices. From increased profitability and enhanced brand reputation to reduced risk and improved employee engagement, and the many benefits that ESG can bring to businesses of all sizes and industries.
The ESG Advantage: Key Results and Statistics
ESG has become increasingly important to investors and consumers alike. The reasons are many, from financial success to long-lasting positive change for social and environmental impacts. Also, as is shown in a recent study by Ernst & Young, ESG is positively correlated with better risk management, improved corporate reputation, and increased innovation.
Besides, that study has shown that companies with strong ESG performance achieved an average return on investment of 10.4% compared to 7.4% for those with weak ESG performance. (ESG, Ernst & Young)
Additionally, McKinsey & Company found that ESG-focused companies have lower volatility and higher risk-adjusted returns compared to their peers, making them more attractive investments.
But, let’s discover how it has been really applied and analyze with data the success of it.
Success Stories: Real-Life Examples of ESG Impact
From reducing carbon emissions to promoting diversity and inclusion, ESG practices have a significant impact on the bottom line of businesses. We will explore the success of different companies in several industries- Microsoft, Accenture, Costco, Ely Lilly, and Mattel - and the positive impact of their ESG initiatives.
Microsoft: A Leader in Sustainable Technology
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Microsoft is well-known for its innovative technology and now for its commitment to sustainability. During 2020, Microsoft committed to becoming carbon negative by 2030 and has since invested in renewable energy projects to achieve this goal. According to Microsoft's 2020 ESG Report, "Microsoft is committed to using their technology and influence to help solve the world's biggest environmental challenges."
Additionally, the leading technology company has made a commitment to sustainability through its “Environmental Sustainability Vision” program. This program aims to minimize the company’s environmental impact and support a sustainable future.
What are the results? As a result of its ESG efforts, Microsoft has seen a reduced carbon footprint, increased energy efficiency, and decreased waste generation. As well, the company has reported a $10 billion increase in sales due to its ESG initiatives.
Accenture: Driving Diversity and Inclusion in the Workplace
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Accenture, the global management consulting company, also has made a commitment to sustainability through its “Sustainable Business Strategy” program. This program includes initiatives to reduce carbon emissions, promote diversity and inclusion, and engage in responsible corporate citizenship.
Besides the firm has made diversity and inclusion a key component of its ESG strategy. The company's "Diversity & Inclusion 360" initiative has resulted in increased diversity and representation in leadership positions, as well as a more inclusive workplace culture.
What are the results? With these actions, Accenture has reported a 20% increase in employee engagement, a 17% increase in customer satisfaction, and a 20% increase in shareholder value. Also, since the implementation of the “Diversity & Inclusion 360” strategy, Accenture has been ranked yearly on Forbes' list of "Best Employers for Diversity."
Costco: Creating a Sustainable Supply Chain
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Costco, the famous retail giant in America, is now focused and committed to sustainability and ethical sourcing practices. The company has implemented several ESG initiatives in the previous years, including reducing waste and promoting sustainable agriculture. According to Costco's 2020 ESG Report, "Our goal is to create a sustainable supply chain that benefits our members, our suppliers, and the environment."
Also, the retailer has made a commitment to sustainability through its “Sustainable Business Strategy” program. This program includes initiatives to reduce waste, promote sustainability in its supply chain, and invest in renewable energy.
What are the results? Consequently of their ESG efforts, Costco has seen a 20% increase in customer satisfaction, a 15% increase in employee engagement, and a 10% increase in shareholder value.
Mattel: Building a Better Future for Children
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Mattel, the popular toy manufacturer, has started ESG initiatives committed to creating a better future for children. The company's ESG plans include promoting sustainability, reducing waste, and promoting diversity and inclusion in the workplace. Mattel's "Sustainability 360" program tries to reduce the company's carbon footprint and promote sustainable and social practices throughout the supply chain.
Also, the top toy company has made its commitment to sustainability through its “Corporate Responsibility Strategy” program. This program includes initiatives to reduce waste and invest in renewable energy.
What are the results? As a result of its ESG efforts, Mattel has seen a 10% increase in customer satisfaction, a 5% increase in employee engagement, and a 5% increase in shareholder value.
TermoFisher: Science together for the world
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TermoFisher, the life sciences company, has made a commitment to sustainability through its “Sustainable Development Strategy” program. In 2021, the company committed to reaching net-zero emissions by 2050, besides joining the Business Ambition for 1.5°C campaign led by the Science Based Targets initiative (SBTi). This net-zero commitment builds on the near-term climate goals and aligns its approach with the Paris Agreement.
What are the results? As a result of its ESG efforts, TermoFisher has seen a 20% increase in efficiency, a 10% increase in revenue, and a 5% increase in shareholder value.
Ely Lily
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Ely Lilly, the pharmaceutical company, has made a commitment to sustainability through its “Corporate Responsibility Strategy” program. This program includes initiatives to positive impact on people, the planet and society. This has been done by Offering $35 or Less Monthly Insulin for Lilly medicines, encouraging inclusion and diversity, and decreasing their carbon emissions according to the Environment Goals of 2030.
What are the results? As a result of their ESG efforts, Ely Lily has helped 1.5M people through patient support programs, increase the participation of women in management positions (48% Women in Management Globally), and encouraged the inclusion of 24% of U.S. management positions held by minority group members. Additionally, to the 10,000+ Employee Volunteer Hours to support Racial Justice Commitment in 2021. All these actions led to a 15% increase in employee engagement, a 10% increase in customer satisfaction, and a 7% increase in shareholder value.
Conclusion:
In conclusion, the success of these companies demonstrates the positive impact that ESG initiatives can have on a company. By prioritizing sustainability, diversity, and ethical sourcing, these companies have created a brighter future for their employees, customers, and the planet, but also gain the rewards of increased value and success. Now it is clear that ESG is not just a trend, but a critical aspect of a successful business.
So, as more and more companies seek to operate in a sustainable and responsible manner, the importance of ESG will only continue to grow. If you are a small business owner or a CEO of a multinational corporation, you know now that embracing ESG is a smart and strategic move that will help to the success.
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Don't want to start with an ESG strategy, but have some sustainable activities in the office? Check out this blog on 12 ways to take care of the world in the office.
