21 Key Statistics Demonstrating ESG Benefits for Businesses

Businesses today are increasingly weaving Environmental, Social, and Governance (ESG) considerations into the fabric of their operations. This strategic shift is seen not just as a matter of compliance but as a pathway to enhanced profitability and reputation. With an eye on the long-term horizon, leadership teams and CFOs are finding that ESG initiatives are more than a cost centre; they are a robust source of value creation.

Understanding ESG ROI vs. ESG Reporting

Clarifying the difference between ESG reporting and ESG ROI is critical. ESG reporting, a method of corporate communication, aims to disclose a company’s ESG efforts to stakeholders such as investors, employees, and the public. It’s about the substance and authenticity of what is being reported—whether it’s highlighting notable achievements with data, making vague promises, or demonstrating a strong performance with limited financial outlay.

The Link Between ESG and Profitability

Moore Global has highlighted a compelling statistic: businesses actively engaged in ESG practices have seen a 9.1% increase in profitability over a three-year span. Furthermore, between 2019 and 2022, companies with a pronounced ESG commitment reported a revenue increase of 9.7%, versus a modest 4.5% for others. In the U.S., this figure spiked to an 11% increase in profitability, outpacing the 8.1% in Europe and 7.4% in Australia. Moreover, 84% of companies have reported that securing funding has become somewhat or much easier due to their ESG initiatives.

The Five Core Benefits of ESG for Companies

ESG offers a range of benefits that both businesses and investors can capitalize on, from increased funding opportunities to strengthened brand identity. Here are five key advantages:

Competitive Advantage: Companies engaging in ESG initiatives often gain an edge over competitors. For instance, PDI Technologies’ GreenPrint found that 66% of Americans are willing to pay more for eco-friendly products. TechTarget’s Enterprise Strategy Group found that 70% of IT professionals acknowledge their companies would pay a premium for IT products from vendors with strong ESG policies.
Attracting Investors: ESG disclosures can magnetize investors. According to a Dow Jones survey, financial professionals predict that ESG investments will double over the next three years. Gallup’s findings indicate that 48% of investors are drawn to sustainable investing funds.
Financial Performance: ESG can boost a company’s bottom line. Nestlé, for example, plans to invest up to $2.1 billion by 2025 to replace standard plastics with recycled ones, anticipating reduced compliance costs and a smaller carbon footprint.
Customer Loyalty: Accenture’s survey showed that 50% of consumers reconsidered their purchasing priorities post-COVID-19, favoring brands that reflect their values. Transparent ESG practices help retain these customers.
Operational Sustainability: ESG-oriented companies are poised for the future. They are equipped to spot cost-saving opportunities, resulting in reduced resource waste and operational costs.

ESG’s Role in Business

ESG considerations—encompassing environmental impact, social relationships, and governance—are intrinsic to a business’s operations. The interaction between these factors can create significant value, as they are interwoven into the very fabric of a company’s functioning.

The Evidence: 21 Statistics That Make a Case for ESG

$3.5B: HP attributed $3.5 billion in commercial sales to sustainability factors [HP, 2022].
€1.2B: Unilever saved approximately €1.2 billion due to sustainable sourcing since 2008 [Unilever, 2020].
$227M: McKesson’s operational efficiency led to this saving in operating costs [McKesson, 2020].
$50M: Nike’s anticipated profit margin increase from eco-friendly materials [Nike, 2021].
$7.5M: Anheuser-Busch InBev’s operational income benefit from sustainable farming [NYU CSB and Anheuser-Busch InBev, 2023].
$2.2M: Savings from energy-efficient projects at Medtronic [Medtronic, 2021].
59%: Companies observed a positive top-line impact from ESG [Deloitte, 2020].
3-6%: Market outperformance by strong ESG companies [Bank of America Merrill Lynch, 2018].
28%: Average increase in sales for diversity leaders [Accenture, 2018].
71%: Younger employees’ preference for value-aligned companies [YouGov and LinkedIn, 2019].
50%: Reduction in employee turnover due to ESG [Glassdoor, Babson College, Starbucks, Campbell, 2019].
85%: Institutional investors consider ESG in decision-making [Gartner, 2020].
61%: Investors view strong CSR as a sign of ethical corporate behavior [Aflac, 2021].
19%: Revenue boost from innovation in diverse teams [BCG, 2020].
$4.2M: Average cost of a data breach or privacy violation event [IBM, 2021].
$50T: Predicted global ESG investments by 2025 [Bloomberg, 2021].
20%: Potential cost savings on loans for ESG-committed companies.
67%: Increase in average ROE for ESG-reporting firms.
9%: Premium customers are willing to pay for environmentally sound products.
75%: Institutional investors favor strong ESG companies.
81%: Consumers prefer genuinely sustainable businesses.

ESG: Where to Start?

Every company’s ESG journey is unique, with strategic, long-term implications. The quantifiable benefits of robust ESG practices span across risk management, operational efficacy, employee retention, brand reputation, and funding access. ESG Pro is here to guide your company in maximizing its ESG ROI, reinforcing the connection between sustainable practices and business success.

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