Mind the Gap: The business imperative of ESG.
Barkley’s new Purpose Action Gap Research Report reveals companies aren’t prepared to discuss ESG commitments with key stakeholders, despite increasing demand from consumers and investors.
The importance of economic, environmental, racial and social justice has grown significantly in the last year, and there has been a verifiable surge in consumer and investor interest in brands that take purpose and ESG — environmental, social, and governance—seriously. In fact, investors have a mandate to ask for ESG information from companies. And when it comes to ESG for consumers, the gap between what consumers say they value, and how they actually behave is narrowing. As a result, companies must be more agile and prepared to act and report on their values and ESG commitments with key stakeholders, including employees, customers and investors.
However, The Purpose Action Gap: The Business Imperative of ESG, a joint research effort between Barkley and Jefferies, demonstrates the majority of today’s brands are not prepared to meet these expectations.
→ 54% of businesses say acting on ESG-related issues is more important than it was 12 months ago.
→ However, only 20% of companies say they are very ready to talk to investors, and only 10% are ready to speak to consumers about ESG-related topics.
In contrast, stakeholder demands and expectations continue to rise.
More than two-thirds of consumers are more committed to supporting socially and environmentally responsible companies than before the pandemic started.
More than 50% of consumers actively research brands and 66% are more likely to support brands if they provide proof of their socially and environmentally responsible behavior.
More than half of respondents said it’s important to work at a company that aligns with their values, but less than half felt that their companies’ performance was very good.
Consumers and investors are ahead of companies in how they value and act on ESG issues. Not having a story on ESG will affect who invests in your business today and how consumers will value and buy your brand. Modern brands will realize taking action is now table stakes and identify commitments across their Whole Brand Spectrum, and provide transparency about their progress with all audiences. Those that don’t, just may fall in the gap.
