Contact Information
- 15800 Progress, Mora, MN, 55051
- info@preessays.com
- +1-786-220-3368
Browse our Free Essay examples and check out our Writing tools to get your assignments done.
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,...