Companies See ESG As Opportunity to Rise Above Competitors

According to a February 11, 2022 article appearing in FM Financial Management, written by Alexis See Tho, a focus on ESG has helped companies become more attractive to investors, customers and prospective employees. 

According to Julie Sweet, chair and CEO of Accenture, getting started on the ESG journey begins with a commitment to measure and use the data to meet sustainability targets. She explained that the shift from merely reporting ESG metrics to using that data to measure performance is key to making sustainability work.

"My top 500 leaders are measured by not only financials but how we're meeting all of those sustainability goals," Sweet says. "Our investment priorities reflect investing in this [sustainability] on behalf of our clients, whether it's building algorithms to see child labour and supply chains or to measure the reduction of carbon emissions."

"This is about a decision, this is not rocket science," she said, adding that it took Accenture 15 months to progress from reporting on three sustainability frameworks to six frameworks and to get the data needed and assurance on its reports.

For Philips, the home appliance and health technology company, implementing ESG and a circular economy model led to increased customer loyalty. It soon realized that the more sustainable model didn't increase cost or reduce profitability. According to Frans van Houten, CEO of Royal Philips, "customers want to be a part of it, and the loyalty of our customer base has gone up as a consequence," he says. "If you fully embed it into your operation, this [sustainability] is not an obligation like CSR [corporate social responsibility] was, but it's a fundamentally different way of running your end-to-end supply chain."

The company implemented a standard set of ESG metrics that is used across the organization in the 150 countries where it is present. This emphasis on ESG means that all employees are familiar with their task to achieve ESG targets.

Alain Bejjani, CEO of Majid Al Futtaim Holding — a developer and shopping mall operator based in the UAE — says that embracing ESG can help companies, especially those in emerging markets, to broaden their investor base to ensure sustainable growth. In 2019, Majid Al Futtaim issued a $600 million green Islamic bond, the first in the Middle East region. Its green bond was oversubscribed by almost six times, with two-thirds of investors from outside the company's region, signaling strong global investor interest in funding companies that care about ESG issues.


For more of this very useful article, please see Companies see ESG as opportunity to rise above competitors - FM (