In our previous ESG article, we highlighted that as Environmental, Social, and Governance (ESG) efforts transition from being a choice to being a necessity, companies will find themselves compelled not only to intensify their ESG efforts, but also to enhance their communication strategies. While many businesses have initiated various ESG actions to align themselves with the evolving landscape, our research reveals that certain ESG initiatives have resonated more effectively than others.
Consumer perceptions on corporate ESG actions
Over 1,000 Singaporean participants were asked to elucidate the specific actions undertaken by companies they identify as excelling in ESG practices. Our analysis showed that consumers place a premium on tangible actions taken by companies, with the top five specific actions being:
- Reducing plastic usage
- Adopting renewable energy
- Reducing carbon emissions
- Integrating ESG principles into business strategies
- Engaging with the community
The most frequently cited initiatives revolved around minimising adverse environmental impacts. Notably, Singaporeans are most concerned about reducing plastic waste. Organisations such as the FairPrice Group received commendations for taking a definitive stance on reducing plastic usage through measures such as mandatory plastic bag charges, the promotion of reusable bags, and the exploration of sustainable packaging options.
Similarly, organisations like DBS were lauded for their adoption of renewable energy and for their financial support for green loans and investments. Participants felt that DBS had a “strong stance on social issues” and some even mentioned that they had gained a clearer understanding of ESG thanks to the bank’s proactive efforts.
Participants were also asked what, in their opinion, characterises companies with bad ESG performance. Once again, the environment took centre stage in the community’s evaluation of ESG performance. Companies in the airline, oil and gas, and fashion and lifestyle sectors were singled out, with concerns around:
- Inadequate environmental practices
- Labour and social concerns
- Lack of commitment to ESG principles and transparency
- Challenges in waste management
- Issues related to cost and pricing
In addition to environmental factors, participants highlighted several social factors, including low wages, substandard working conditions, worker exploitation, and a perceived prioritisation of profits over initiatives to enhance the affordability of products or services.
ESG relevance in a dynamic corporate landscape
Interestingly, when participants were asked to evaluate companies in terms of ESG practices, they often recalled top-of-mind issues, potentially influenced by recency bias. In contrast, impactful initiatives such as the adoption of sustainable aviation fuel by Singapore Airlines to curb carbon emissions may go unnoticed by the general public.
In today’s landscape, the importance of effective ESG communications cannot be overstated, particularly for consumers who vote with their wallets. Ideally, ESG imperatives need to be woven into the fabric of a company’s strategy and purpose. In addition, companies need to communicate about their ESG initiatives consistently and regularly, so that their audiences are constantly kept updated. It is also important for companies to continually adapt or innovate their ESG branding – the recent demise of Body Shop has illustrated the importance of proactive ESG engagement to ensure sustained relevance and positive impact.
With the complexity of green strategies and the myriad ways to contribute positively to the ESG space, it is in every company’s interest to continuously innovate and strategically and effectively market its ESG initiatives to its audiences.
For more insights, download the Singapore report here: https://secnewgate.com/esg-monitor/reports/singapore-report-2023/
