BrazilCompanies that offer top ESG value see 5x higher revenue growth
Sustainability sells: Brands that embrace purpose and sustainability can capture more consumer interest and drive growth. Companies that can show their purpose through environmental, social, and corporate governance (ESG) values are often at an advantage.
A study from leading global consulting firm Bain & Company shows how companies that integrate ESG purpose into their branding are more successful. Companies that scored the highest in sustainability elements had five times the revenue growth of those that scored the lowest.
The analysis references what is called the ‘Elements of Value’ – a framework that categorizes the different types of value that consumers experience when engaging with a brand or product. It is used to measure the attributes that contribute to consumer satisfaction and loyalty.
By incorporating specifically ESG-focused Elements of Value into branding, companies can benefit tremendously. Those elements can include notions like ethics, humanity, care for the Earth, inclusivity, health, and waste reduction.
ESG concerns were in the top three most important purchasing criteria in the of 200,000 consumers in four countries. In addition, consumers are increasingly ‘divesting’ from brands with less perceived commitment to sustainability. For example, 33% of young US consumers (aged 18 to 24) claimed they would boycott companies with poor labor standards, according to Bain & Company.
The report gives the example of Dove, which in 2004 made a significant shift in its marketing approach by replacing professional models with regular women in their campaigns. This move aimed to promote body positivity, boost women's confidence, and challenge traditional beauty standards, leading to notable revenue growth for the brand.
By adopting this purpose in its branding, Dove’s revenue promptly grew by around three times more the forecast growth. The messaging that women should feel comfortable in their skin resonated with consumers and translated into success for the company.
As ESG increasingly becomes a top concern for business leaders, there is also the danger that companies may use sustainability as a mere marketing tool without neither understanding nor genuinely committing to it. This can backfire for companies.
This superficial engagement with sustainability is often called ‘greenwashing’, where brands create a false impression of environmental responsibility. Greenwashing deceives consumers by making unsubstantiated or exaggerated sustainability claims, ultimately undermining their trust in brands and hindering meaningful progress in sustainability.
