ESG is a framework that helps stakeholders understand how an organization manages risks and opportunities related to Environmental (sustainability), Social (human rights and relationship with community), and Governance (corporate operations).
To thrive and remain competitive, manufacturers and retailers must adapt to rapidly changing shopper expectations. But which elements are most important to shoppers; where should companies prioritize?
According to our latest ShopperScape® study - ESG deep dive: Exploring the value drivers of ESG - 38% of shoppers hold businesses and retailers accountable to make the world a better place. Providing transparency into business values and practices, including fair wages, boosts reputation and empowers shoppers to put their money towards products and services towards companies with aligned values. Let's take a quick look into how some brands and retailers are approaching ESG standards.
Shoppers believe businesses must lead the charge on eco-initiatives. For some, retailers and brands best respond by prioritizing preservation and reversal initiatives in their business practices. Pledges and efforts such as net neutral emissions and renewable energy are two examples of ways brands and retailers can better align their business and manufacturing practices with customer demands.
Dutch supermarket Ahold Delhaize stated that it plans to reduce carbon dioxide emissions for its operation by 50% by 2030 and become net zero by 2040. "Our commitment is to future generations, to continue to play a leading role in the transition to a more sustainable food system," says Jan Ernst de Groot, Ahold Delhaize's chief sustainability officer. The grocer's plans aim to help customers understand the impact of their buying decisions and make choices that fit their needs.
As seen in our ShopperScape® data, 41% of shoppers report Black/diverse-owned assortment is nice to have when shopping at retailers, while 25% of shoppers report it's a major retailer determinant. National home improvement retailer Lowe's provides transparency and detailed actions through their supplier diversity operations. Lowe's provides the opportunity for small and diverse businesses reach their goals while offering the products and services customers. Per the brand's policy, "To qualify as diverse owned, a business must be owned by a US citizen or US resident alien; be a for-profit enterprise headquartered in the US or its trust territories; and be at least 51% owned, operated and controlled by one or more of the following diversity classifications: women, minorities, veterans, LGBTQ+ persons or persons with a disability." Lowe's diverse supplier business practices provide a wider assortment of products at various price points to shoppers, all while supporting small and diverse businesses.
In February, Walgreens plans to hold its annual Localization Summit, a virtual showcase for diverse local and regional businesses and entrepreneurs to showcase their products to merchants of the drugstore chain. “To be a trusted health and well-being destination, we work hard to remain relevant for customers in each of our communities and curate a selection of products and services that meet their unique needs,” states Luke Rauch, Walgreens chief merchandising officer and senior vice president.
A sense of community empowers shoppers. According to our ShopperScape® data, 40% of shoppers would pay more for local or small business-sourced products. Walgreens’ plans to elevate local bands across the US provide opportunities for brands to expand their customer reach while simultaneously allowing shoppers to put their dollars towards supporting people and products close to home.
Major technology and in-home service brand Best Buy leads taking ESG practices seriously by releasing their annual Best Buy Fiscal Year 2022 ESG Report. This 100+ page document provides customers, investors, and employees an inside look into the organization's total ESG practices, including sustainability practices, corporate governance, and Diversity, Equity & Inclusion. Corie Barry, CEO of Best Buy Co., states, "As a purpose-driven company, we continued to deepen our commitment to our community and the environment. We believe that our Environmental, Social and Governance efforts are not just the right thing to do, but directly tied to long-term value creation and business success." This level of transparency by Best Buy illustrates the organization as being purposefully driven though their actions. Their corporate sentiment, partnered with actual data, allows shoppers to make better decisions. Consumers have the right to make the best purchase decisions for themselves.
Are you looking to discover which elements of ESG are most important to shoppers and how they influence shopping and buying behavior? Kantar's new ShopperScape® study - ESG deep dive: Exploring the value drivers of ESG - uncovers shopper sentiment within these three pillars. The study provides a critical understanding of what's important to shoppers, how each element impacts their current shopping habits and categories purchased, and key motivators and barriers.
Download your data-rich preview of Kantar's latest ESG study here to discover insights you can use in the new year and beyond.
