Although environmental, social, and governance (ESG) criteria have long been associated with secondary issues, the tides are now quickly changing.
Taking ESG criteria into account is now a must
Sources: Business Development Bank of Canada (BDC), Report, ESG in Your Business: The Edge You Need to Land Large Contracts, March 2023 / FMI and McKinsey, Global Parity Alliance: Diversity, Equity and Inclusion Lighthouses 2023, January 2023
So much so that, in 2020, brands and businesses reportedly spent $7.5 B on Equity, Diversity, and Inclusion (EDI) efforts worldwide.
Equity, Diversity, Inclusion: generalized awareness
Source: International Monetary Fund (IMF) and McKinsey, Global Parity Alliance: Diversity, Equity and Inclusion Lighthouses 2023, January 2023
And at the rate things are going, there’s still lots to be done. It will take:
- At least 29 years for management teams in the West to achieve gender equality, and at least 24 years to achieve ethnic diversity equality;
- 151 years to make up for the economic disparity between genders worldwide!
Turning words into actions
In 2023, surveys point to fatigue with regard to certain brand strategies, which are seen as superficial: consumers expect businesses to play an active role, namely by initiating changes internally through strong initiatives within their HR policies.
EDI initiatives: a sometimes slippery slope for brands
Source: GWI, Rapport Connecting the Dots, 2023
Virtuous strategies . . . that pay off
While inclusion efforts have a positive societal impact, they also allow businesses to stand out from the competition and generate additional profits. Figures in this matter are telling:
- +19% in revenue for ethnically diverse businesses, and
- +36% probability of generating higher returns (for shareholders).
A positive impact on consumers’ buying intentions
Sources: Vividata, Spring 2023 survey, Bases Québec Franco et Canada anglo / Grenier aux nouvelles, De la parole aux actes en ÉDI, April 2023
Once such initiatives have been deployed, it’s crucial that they be shared effectively with consumers. As such, the winning formats are ads using a positive, inspirational approach, with a touch of humour.
Additional source: Pivotal Solutions, DEI by the numbers: 19% higher revenues, 25% greater profit and retention and attraction of team members, March 2023.