Purpose, the idea that brands should stand for something greater than making money, is a guiding force for inclusive business adapted to a brand’s cultural diversity. The report studies the implications of environmental, social, and governance (ESG) reporting and action that has become an institutionalised way of reporting non-financial metrics in making the world a more complete place. It looks at how companies are responding to ESG practices to make more substantial transformations.

Part One – The Consumer

ESG matters more to consumers post-COVID-19. Research suggests that companies that prioritise ESG add value that is successful in the long term. Consumers, in particular, millennials, and Gen Z indicate they are willing to pay more for ESG practices. The desire for brands’ point of view on ESG has high importance, and they want suitable proof of evidence or impact. A 2021 study by Barkley and Jefferies based on studies of 2,500 consumers shows that focusing on climate change ahead of worker rights is important for Asian or Pacific Islander groups. However, African American or Black consumers prioritise the focus on diversity and inclusion over other groups.

Part Two – Business Response

Business ESG importance is growing, and ESG action is now a business imperative. Companies report people management steps contribute to their reasons for managing ESG. Among the top five reasons were retaining and attracting key talent and engaging employees. A third of investor companies are not yet ready to speak to their actions on ESG issues, and this rises to 49% of management executives who are not prepared.

Part Three- So how do we close the gap?

The report offers recommendations for businesses to close the purpose action gap in the wake of COVID-19 and improve ESG practices. It recommends that brands should provide suitable proof of evidence or impact, with evidence of participation in multi-stakeholder partnerships. Additionally, the report indicates that brands should time-bound ESG targets and plans, and they must communicate with their investors, management teams, and customers to ensure they are up-to-date with their ESG practices.

Conclusion

The authors find that ESG practices are a critical business imperative, with 98% of companies saying ESG action is more important or much more important than it was 12 months ago. The report concludes that companies that focus on a culture of diversity, inclusion, and employee wellness are better positioned to implement effective ESG practices that deliver better value in the long run. The report recommends that companies communicate with their investors, management, teams, and customers to ensure their ESG practices are up-to-date. Furthermore, brands must prove their ESG stories with evidence of impact or progress against goals. The report’s recommendations urge brands to maximise their positive social impact by showing up in civil society for what they believe in and reducing their environmental impact to zero and beyond.