We live in times of increased sustainability awareness, and businesses must prioritise sustainability and social responsibility to stay relevant in the modern marketplace.
What is ESG and why it matters
Environmental, social, and governance (ESG) are the three core elements of sustainable business practices. From initiatives and policies to reporting, adherence to good ESG principles is now becoming the norm for all businesses. ESG can be interpreted differently based on the facet of a business it describes. For example, ESG reporting is a business’s act of reporting the environmental, social, and governance impact of business activities, decisions, changes, investments, etc., both inside and outside the organisational fold.
This may include affirmative action to make the workforce more diverse (good governance), participating in community development in areas the business operates in (social impact), and reducing their carbon footprint by adding more EVs to their fleet (environmental impact).
ESG matters because:
- It fosters accountability, driving brands to be positive forces for change.
- It enhances financial performance, as investors and consumers increasingly favour sustainable companies.
- It reflects the business’s commitment to a more sustainable world.
Consumers want sustainability
While adopting good ESG practices is no longer a nice-to-have but a must-have for companies, it’s just as important that their consumers and other stakeholders (such as partners and investors) are aware of their ESG initiatives and their impact.
One way brands do this is through sustainability reporting. Businesses that are open and clear about their ESG efforts and their impact can earn the trust of consumers who increasingly prefer transparent and socially responsible brands.
As consumers become more aware of the environmental and social impact of their choices, they seek out brands that align with their values. For example, many consumers now look into the business practices of the companies they engage with, and ask questions about the product’s carbon footprint, the labour conditions, and what materials are used in its packaging.
For eCommerce brands in particular, authenticity can put you at a powerful advantage with a new generation of consumers, especially when it comes to Gen Z!
So, how can your brand demonstrate its impact to stakeholders in a clear, authentic manner while avoiding greenwashing?
The power of transparency is undeniable
The backbone of sustainability reporting is data. For one, it provides a clear picture of your current baseline while identifying the most potent areas for improvement. Furthermore, it enhances your brand’s reputation, boosting consumer trust and engagement.
Without access to the right data, you risk falling into the greenwashing trap—presenting an image of sustainability that doesn’t hold up under scrutiny—which can affect your brand’s image and consumer trust.
Collecting and making sense of data is no small feat, and this is where eGreenBadge’s technology solution can make all the difference. eGreenBadge helps eCommerce brands overcome the challenge of accurately measuring and reporting Scope 3 GHG emissions across the entire supply chain, enabling them to quantify and demonstrate their environmental performance to stakeholders and improve their ESG score. Reach out today to see how we can help you share your sustainability story with the world!
