ESG considerations are broad in scope, but ultimately force businesses to be accountable for their actions. It is every business’s responsibility to consider resource usage, waste handling, carbon emissions, climate change prevention, biodiversity protection and many more in their short to long term operations and goals.
As we said, ESG practices are consumer-driven and are no longer an option, but a necessity for businesses to survive. According to PWC, 76% of consumers say they will stop buying from companies that treat the environment, employees, or the community in which they operate poorly. The absence of corporate social responsibility hurts companies immensely, yet the flipside of one that supports social and environmental issues is reported to spark 88% of consumers to be more loyal to the business.
Most businesses have listened to how consumers make their purchase decisions and incorporated ESG into their marketing, but unfortunately left out the most important part of taking authentic action. ‘Greenwashing’ is the term used to describe businesses that mislead consumers with false information and promises about their environmental impact. A recent internet sweep by the ACCC found that 57% of businesses in Australia raised concerning claims that could be potentially misleading to the consumer.
Not only do businesses with vague, unqualified and exaggerated claims provide unfulfilled promises to their customers, but their actions directly undermine the efforts of companies who make a legitimate effort. Suddenly their genuineness comes into question as they are incorrectly pooled in with inauthentic businesses.
The greenwashing problem is so prevalent, that there are awards being given out to companies for being ‘authentic’, as if to say that this is something special or out of the ordinary.
It is not all bleak however, as more and more companies are making the right decisions for ESG practices to be the standard, not that exception.
WLTH is Australia’s first Impact Lender that cleans up our oceans, one home loan at a time. WLTH pledges to clean up 50m² of beach and coastline alongside Parley for the Oceans for every loan settled.
