ROOT
Study reveals Aussies are willing to pay a premium for ESG leadership
New research suggests that companies can achieve ‘substantial’ top-line growth by being a leader in ESG.
Study reveals Aussies are willing to pay a premium for ESG leadership
New research suggests that companies can achieve ‘substantial’ top-line growth by being a leader in ESG.
A new study conducted by global management consulting firm, Kearney, has revealed that Aussies are willing to pay between 40 and 80 per cent more for leading performance across environmental, social and governance (ESG).
Additionally, the firm found that between 20 to 35 per cent of Aussie respondents would be more willing to purchase goods and services with ESG leadership.
“Around the world, companies are trying to embrace ESG practices in an authentic way, but still tend to view ESG as a cost to the top line,” said Kearney ANZ ESG lead, strategic operations lead and partner, Kate Hart.
“Our data shows that integrating ESG principles into a product’s life cycle can actually give companies the competitive advantage they are seeking, positioning them favourably in the eyes of consumers and helping their products to stand out from the crowd.”
Kearney suggested that companies needed to meet three key requirements to benefit from the potential increased market share and pricing premium.
Firstly, the firm said that ESG innovation must go beyond corporate positioning and should be embedded in the company’s product offering.
Furthermore, Kearney said that the product or service has to be a leader on ESG performance in its respective market rather than simply being on par with the industry.
Finally, the product or service must also lead on all three of the components of ESG.
“Corporate sustainability practices and standards have typically and increasingly been viewed by companies as a ‘need to do’ at a potential cost to shareholders,” said partner, board member and founder of Kearney, Ignite Nigel Andrade.
“The prevailing view is that any benefits that may be realised by these investments are likely to be, at best, in either cost reduction or cost avoidance. Instead, our research shows that ESG could be the primary focus of innovation that drives the top line to the benefit of all stakeholders.”
The firm recommends that organisations should review their approach to ESG and consider it as an investment rather than a cost.
“We believe these findings show the emergence of a new mindset, one where ESG is not seen as something companies just ‘do’, but principles which are critical to how and why businesses grow,” said Ms Hart.
RELATED ARTICLES
Invest
Good Return launches $10 million fund to support women entrepreneurs across Asia-Pacific
Social purpose organisation Good Return has launched a second Impact Investment Fund targeting a $10 million capital raise to support women-led businesses in developing Asia-Pacific economies. Read more
Invest
Australian investors flock to US stocks and crypto after Trump victory
Trading volumes in US equities surged 20 per cent on Australia's second-largest share trading platform following Donald Trump's election victory last month, as local investors sought to capitalise on ...Read more
Invest
Investment firm raises $9bn for global special situations fund
Bain Capital secured $9 billion for its latest Global Special Situations Fund, positioning the firm as one of the world's largest special situations investors. Read more
Invest
Morrison Securities unveils plug-and-play global trading access to 15 countries
Equities clearing firm Morrison Securities has partnered with trading technology provider ViewTrade to introduce one of Australia's first plug-and-play global trading solutions, enabling streamlined ...Read more
Invest
Institutional investors react positively to policy stimulus in September
State Street Global Markets has reported a rebound in institutional investor risk appetite in September, driven by supportive policy announcements from central banks. Read more
Invest
AMP partners with Striver for Brimstone event to attract new financial advisers
AMP has announced a partnership with advice community and careers technology platform Striver for the annual Brimstone event series, scheduled to take place in Sydney next week. Read more
Invest
North expands managed portfolio options with new customisation features
North, a leading Australian wrap investment platform, has announced an expansion of its customisation options for managed portfolios, aiming to provide advisers with greater flexibility for their ...Read more
Invest
State Street partners with Taurus to expand digital asset capabilities
State Street Corporation has announced a strategic agreement with digital asset infrastructure provider Taurus SA to enhance its digital asset offerings for institutional clients. Read more
Invest
Good Return launches $10 million fund to support women entrepreneurs across Asia-Pacific
Social purpose organisation Good Return has launched a second Impact Investment Fund targeting a $10 million capital raise to support women-led businesses in developing Asia-Pacific economies. Read more
Invest
Australian investors flock to US stocks and crypto after Trump victory
Trading volumes in US equities surged 20 per cent on Australia's second-largest share trading platform following Donald Trump's election victory last month, as local investors sought to capitalise on ...Read more
Invest
Investment firm raises $9bn for global special situations fund
Bain Capital secured $9 billion for its latest Global Special Situations Fund, positioning the firm as one of the world's largest special situations investors. Read more
Invest
Morrison Securities unveils plug-and-play global trading access to 15 countries
Equities clearing firm Morrison Securities has partnered with trading technology provider ViewTrade to introduce one of Australia's first plug-and-play global trading solutions, enabling streamlined ...Read more
Invest
Institutional investors react positively to policy stimulus in September
State Street Global Markets has reported a rebound in institutional investor risk appetite in September, driven by supportive policy announcements from central banks. Read more
Invest
AMP partners with Striver for Brimstone event to attract new financial advisers
AMP has announced a partnership with advice community and careers technology platform Striver for the annual Brimstone event series, scheduled to take place in Sydney next week. Read more
Invest
North expands managed portfolio options with new customisation features
North, a leading Australian wrap investment platform, has announced an expansion of its customisation options for managed portfolios, aiming to provide advisers with greater flexibility for their ...Read more
Invest
State Street partners with Taurus to expand digital asset capabilities
State Street Corporation has announced a strategic agreement with digital asset infrastructure provider Taurus SA to enhance its digital asset offerings for institutional clients. Read more
