ESG Strategy

Sapient Advisory supports organisations looking to embed sustainability and social responsibility into their core operations for the first time. By leveraging industry knowledge and a practical approach, we guide companies through the complexities of developing tailored ESG frameworks that align with their values, stakeholder expectations and regulatory requirements.

For further information on how to implement an ESG strategy, please contact us.

INSIGHT: Why Having an ESG Strategy is a Competitive Advantage

In today’s business landscape, having a strong Environmental, Social and Governance (ESG) strategy is no longer optional - it’s a critical driver of long-term success. As investors, consumers and employees increasingly prioritise sustainability and ethical business practices, companies with robust ESG strategies are not only boosting their reputations but also reaping financial and operational rewards. This insight explores the key benefits of integrating ESG into the core of a business strategy.

Enhanced Reputation and Brand Loyalty

A well-developed ESG strategy significantly improves a company’s reputation. Consumers today are more likely to support brands that demonstrate a commitment to social and environmental causes. According to a 2023 Nielsen report, nearly 73% of global consumers are willing to change their consumption habits to reduce their environmental impact. This has led businesses to respond with sustainable products and practices that align with customer values.

Attracting Investment

Investors are increasingly considering ESG factors when making decisions. Sustainable investing has grown exponentially, with more than $35 trillion in assets globally being managed under ESG criteria as of 2022, according to the Global Sustainable Investment Review. Companies with a robust ESG strategy attract investors who are looking for long-term value and risk mitigation, as these organisations are often seen as more resilient to regulatory, environmental and social risks.

Operational Efficiency and Cost Savings

Incorporating ESG principles, particularly environmental sustainability, can lead to significant operational efficiencies and cost reductions. Companies that prioritise reducing energy consumption, minimising waste and optimising resource use often see direct financial benefits.

Attracting and Retaining Talent

Today’s workforce, especially Millennials and Gen Z, places a high value on working for companies that align with their personal values. According to Deloitte’s 2023 Millennial Survey, nearly 60% of younger workers consider a company’s social and environmental actions when deciding where to work. As such, having a strong ESG strategy is a powerful tool for attracting and retaining top talent.

A great example is Salesforce, which has become a leader in ESG by focusing on environmental sustainability, equality and ethical governance. Salesforce’s “1-1-1” model, where 1% of the company’s product, equity, and employee time is dedicated to philanthropic efforts, has made it an attractive employer for purpose-driven individuals. Its focus on employee wellbeing and sustainability has not only enhanced its brand as an employer but has also contributed to a high level of employee engagement and satisfaction.

Regulatory Compliance and Risk Management

As governments and regulatory bodies around the world ramp up their focus on sustainability and corporate responsibility, having an ESG strategy helps businesses stay ahead of potential compliance issues. Companies that integrate ESG into their operations are better equipped to adapt to evolving regulations, such as carbon taxes, emissions standards, or requirements around diversity and labour practices. Proactively addressing these areas can also minimise risks associated with legal challenges, fines and reputational damage.

Conclusion

An effective ESG strategy is not just a moral imperative - it’s a business advantage. Companies that take ESG seriously benefit from enhanced brand loyalty, stronger investor interest, cost efficiencies and a more engaged workforce.

Sapient Advisory