Topic: Sustainable Branding Strategy

Title: Impact of ESG Compliance on a Brand’s Sustainability and Investment Suitability

1.      Introduction

            Environmental, social, and governance factors have a big impact on how well a company performs. Many investors, though, are still unaware of how it may affect the company. As a result, underinvestment in the many concepts' components and subpar organizational performance are frequently the results. As a result, it is critical for business executives to comprehend this concept's many elements and apply them to their investment as a whole. Information on an organization's environmental awareness and environmental effects is referred to as ESG information. The concept's "social" component relates to how well the business gets along with its neighbors and its own workers. The company's governance rating is extremely important to the development of the business. This is because organizations can only function as effectively as their leaders can. As a result, these factors can be used to assess and rate the firm's overall value.

ESG factors are frequently used to gauge a company's sustainability. This means that the performance of the company is greatly influenced by the levels of employee happiness with the company, general corporate governance, and the firm's environmental consciousness. Some companies, however, still do not recognize the value of having a high ESG score. The total result of this deficiency is the failure of the firm or even subpar performance in the several sectors where the business ought to be excelling. This frequently happens as a result of management and staff ignorance of potential threats to the organization. If the corporation had given appropriate consideration to these various concerns, the lack of proper risk management techniques would not have exposed the company to such a considerable degree.

Due to the great significance of ESG in the decision-making of many investors and company executives in the modern business world, it qualifies as a strategy for sustainable branding. Sustainable branding refers to how a company presents itself with regard to its sustainability practices. The presentation plays an important role in determining how the different stakeholders view the company. With the increased sustainability demands of the world, customers and investors are more attracted by products and companies that have shown high compliance to future sustainability.

Therefore, this paper seeks to establish the impact of ESG factors on the sustainable branding of a company and its presentation in the eyes of different stakeholders. This paper suggests that having a good ESG score comes to the advantage of the company. First of all, it dictates how the employees interact with the company and the customers. This determines their commitment to serving the company and how dedicated they are to the achievement of the firm's long-term goals. It also seeks to show how a good ESG rating helps the company in terms of attracting investors. This is because modern investors are out to invest in companies that they are sure will bring the expected return on investment. Finally, it will show how a good ESG rating may help in attracting more customers and their loyalty to the brand for the long-term gain of the company and the customers.

In summary, this paper seeks to establish the impact of ESG scores on a company’s sustainability. Therefore, ESG compliance is hypothesized to be a great tool in the sustainable branding of modern-day organizations. Sustainability in this context refers to how long the brand will last in the market and the customer’s mind amidst increasing competition and technological advancements that are causing a huge challenge to the existing brands.

2.      Literature Review

2.1  Impact of Good ESG Scores on Employees

According to research by Harter et al., (2021), what happens inside of an organization has very easy ways of spreading to the outside world. By this, the researchers imply that the internal practices of the organization have a very easy way of getting known to the outside world and even easier ways of affecting its performance. Based on the company’s ethical compliance and adherence to ethical and moral concepts, the company’s employees are capable of transmitting the energy. The study, therefore, shows a positive correlation between companies that treat their employees well and their overall financial performance. An analysis of how satisfied the employees of various companies were based on the company's ethical compliance also showed a positive correlation between high ethical compliance by the companies and high employee satisfaction. Such satisfaction is a social aspect of the organization. This is how the employees in the company feel about it, and the results are very transmissible to the outside world. From the deep exploration and analysis of big companies, business executives can learn a lot from research. This will influence the decision-making process in the organizations.

Employees deserve respect at their workplaces for optimal contribution to the success of the company. This is according to the same study by Harter et al. (2021). The study found that employees that do not feel respected at their workplace have a higher attrition rate compared to those that are respected. Moreover, their service delivery is optimized as they want to contribute more. The study also found out that they have higher loyalty to the organization, which leads them to become better brand ambassadors. With the company's employees feeling like an important part of the organization,...