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To find the answers , from 25-29th April 2022 we asked a total of 811 C-suite executives and senior management teams across the UK what they considered their business ' impact on the environment and their social impact and responsibilities to be .
More than half ( 52 %) of UK businesses polled who said they wanted to become a gold standard green company or Certified B Corporation admitted that the number one reason for bringing in such Environmental Social and Governance policies would be to improve brand perception and influence customer purchasing decisions .
As well as the confession that improving public perception of their brand came ahead of showing their commitment to people and planet ( 45 %), just under a third ( 28 %) admitted they would only adopt ESG measures to raise their profile as an employer of choice while one in five ( 22 %) said they would do it just to drive profits and sales .
The research found there was a meteoric rise in the number of companies adopting ESG policies since the Pandemic started . Fewer than one in five ( 17 %) said they had any in place in March 2020 while nearly half ( 49 %) of the businesses adopting ESG measures say they have only rolled them out in the last six months and an additional third ( 34 %) did so between April 2020 and April 2021 .
Nearly a third of the businesses surveyed ( 28 %) also said they planned to become a Certified B Corporation within the next 12 months .
Our findings have confirmed the suspicions we have long held : the hype around ESG and gaining B Corporation accreditation has little to do with a genuine desire to be a better business that balances profit with the need for positive environmental and social impact .
Rather , it is performative behaviour that has resulted in a tsunami of businesses viewing ESG as a catalyst for post-pandemic growth .
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The poll also found that more than a third ( 35 %) of businesses simply pay lip service only to the wider impact of their policies , admitting they do not financially gift anything at all to environmental or social impact initiatives .
And , of the 65 % that do , half ( 49 %) revealed they only gift a tiny proportion of their profits - on average of 1 % of their net profit , whereas one in six ( 16 %) are more generous and gift a percentage of their net income to such causes .
There is a plethora of research from the last two years that shows how greenand purpose-led businesses outperform the market . Many more studies have demonstrated how customer purchasing decisions are increasingly shaped by what a business says and does .
However , what we are seeing here is a lot of smoke and mirrors and very little , if any , real commitment among the majority of businesses that claim to be green- and purpose-led . To illustrate the point , consider the following examples :
Example 1 : gifting using net profit
• If a business has annual net revenues of £ 1 million and a net profit of 10 % (£ 100,000 ), 1 % of that net profit equates to £ 1,000 per annum for ESG initiatives . Or £ 19 a week .
Example 2 : gifting using net income
• If the same business as above opts instead to gift from net income instead of net profit , that £ 1,000 figure is multiplied ten-fold to £ 10,000 that can be gifted to the same causes . Or £ 190 per week .
Gifting a percentage of net profit is little more than tokenism and to describe it as a genuine commitment to people and planet would be extremely weak at best .
Far too many businesses are jumping on the green and purpose bandwagon in a bid to seduce customers into thinking they are an ethical organisation that supports good causes . Moreover , they are doing so to build
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brand equity , drive sales , and boost profits . It is baseless , bollocks , and putting the business itself at serious reputational risk .
Customers are increasingly holding businesses to account , and those organisations found guilty of green- or purpose-washing will struggle to win back the trust and loyalty of those who matter the most to them .
I believe we will see an even sharper rise in businesses boasting ESG credentials in the coming months but this will be matched by an even stronger demand among stakeholders for greater transparency in the form of Responsible and Impact Reporting . There will be no hiding from this , consumer and client demand will necessitate it .
Geographically , outside London , the North West was found to have the highest proportion of businesses ( one in five ) planning to implement an ESG policy . This was followed by the Midlands ( 2nd ), Yorkshire ( 3rd ), South West and Scotland ( joint 4th ), Northern Ireland ( 5th ), Wales ( 6th ), East of England and South East ( joint 7th ), and lastly the North East ( 8th ).
Established in 2014 , Clearly is a reputation management and public relations agency headquartered in Bath and with a hub in London . We work across the Professional Services , Charity , Hospitality , and Technology sectors . In 2021 , Clearly became only the seventh PR agency in the UK to become a Certified B Corporation out of 4,000 .
Visit Clearly PR online at : www . clearlypr . co . uk
Follow Paul on Instagram , @ talking _ pr for more comment on PR , reputation and ESG .
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“ Customers are increasingly holding businesses to account , and those organisations found guilty of green- or purposewashing will struggle to win back the trust and loyalty of those who matter the most to them .” |
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