There’s been an onslaught of crises that have pulled businesses into thorny issues, reinforcing the need to implement robust environmental and social governance strategies or risk not meeting the expectations of consumers and employees. Companies are asking themselves whether they are doing enough related to ESG (performance) and whether consumers are giving them credit for their ESG activities (perception).
When you compare ESG performance vs. ESG perception, interesting gaps emerge. Our analysis looked at publicly available third-party ESG metrics and brand perception data from 15,000 US consumers across 275 brands to better understand this discrepancy.
Leaders: High Perception/High Performance
The Leaders category exemplifies the best of the best. To reinforce their coveted positions, companies should:
Invisible Innovators: Low Perception/High Performance
Invisible Innovators are characterized by marketing challenges around not communicating ESG strategies to stakeholders.
To reverse “green hushing” – staying too quiet about ESG accomplishments – companies can:
Laggards: Low Perception/Low Performance
Laggards may still see ESG as a siloed function or are in an industry where no player is focused on delivering against ESG. Or the company is lagging relative to its peers.
There is opportunity to establish a strong foundation in all areas:
At Risk: High Perception/Low Performance
Companies with an ESG “halo” have gained rapid traction because of their idealistic missions. But often, they falter in that journey because they don’t realize the investment needed to deliver, surfacing risks of “greenwashing” or “virtue signaling.”
Companies here should consider the following moves:
Closing the Gap
Despite attempts to politicize the topic, the underlying issues of ESG are here to stay, and they are only becoming more vital and impactful to companies’ business strategy. Businesses need to act now and assess their ESG performance vs. perception gap to ensure they’re delivering authentic, real impact while being recognized by it for key stakeholders – otherwise they risk falling behind their competitors, tarnishing their reputations, or missing out on new opportunities.