Understanding the impact of ESG & sustainability on businesses

Authors

Monika Mihir

What is ESG and why is it relevant?

ESG (environmental, social and governance) is a set of measures through which a business can assess its impact on the world. Alongside sustainability, these are factors that affect every consumer and therefore businesses alike, increasingly influencing how we think, behave, and live our lives. ESG and sustainability are quickly becoming the criteria on which businesses succeed or fail, especially as we look further into the future.

Why do businesses need to act on ESG & sustainability fast?

The Companies Act 2006 requires large and medium-sized companies to publish an annual strategic report which must include information on ESG-related items, such as the business’ environmental impact, employee disclosures, social, community, human rights issues, and the company’s policies on each. In addition, the UK passed the net zero emissions law¹ in 2019 targeting net zero greenhouse gas (GHG) emissions by 2050. To reach that target, the government has pushed reporting requirements. As a result, consumers and businesses are increasingly looking to reduce any unsustainable processes and practices, which is increasingly influencing how we behave and how we live our lives.

As companies are recording their environmental impacts, individuals are becoming more aware of their own carbon footprints. In fact, 62% of the UK population² now believe that climate change is the biggest threat to civilisation. Social consciousness continues to grow as consumers make decisions on how businesses conduct themselves, and 36% of the UK³ claim that they try to only buy from companies that are seen as socially and environmentally compliant. Businesses are starting to understand that not only is acting in an ethical and sustainable manner not having a negative impact on business, but that it is a requirement to act in the positive.

So, how can CACI help businesses navigate consumer attitudes towards ESG and sustainability?

Using CACI’s ESG Score to support ESG & sustainability-driven businesses

CACI can help businesses make informed decisions to quantify and ultimately improve their carbon and social impact. The ESG Score can help businesses identify customers that are most concerned about ESG issues and support businesses in engaging with them regarding the brand’s products, prices and propositions.

CACI’s ESG Score also uncovers individual attitudes towards environmental issues, social equality and governance, and can be applied to an existing customer base to identify a business’ exposure as well as help them re-position for the future.

The resulting data helps to inform decision-making and decipher the impacts that carbon footprints have in various societal capacities and circumstances.

Carbon footprint of household + travel

A household’s carbon footprint is assessed based on household consumption – food, housing, transportation, clothing, and other personal services. It is an important contributor to greenhouse gas emissions. Leveraging the depth of our unique consumer data, CACI can assess the type of property, mode of commute, consumption behaviour and more to estimate the carbon footprint of a household. Businesses can use his information to target the right households and areas with focused messaging to help reduce global carbon emissions.

Carbon Footprint of vehicles

CACI’s route optimisation software, Pin Routes, allows businesses to create routes for visits, deliveries or collections, ultimately reducing logistics costs and improving sustainability by reducing unnecessary driving. It now also allows businesses to understand the carbon emissions or carbon footprints associated with logistics operations. This in turn can be used to make informed decisions that can help with the move towards electric vehicles.

Carbon Footprint of marketing

There is a carbon cost for all marketing activity– even an email takes up space on servers and has a sunk carbon cost. CACI quantify the carbon impact of various channels, allowing our clients to undertake a full carbon impact assessment on all of their marketing activity and identify optimum channel mix to best balance campaign efficacy with carbon impact.

Social Impact Assessment

The provision of services across the UK is not equal, with some areas having much better access to civil services (e.g. healthcare, education or leisure centres) than others. CACI has quantified the accessibility to these services at postcode level and has identified areas that require additional support. The goal of impact assessment is to bring about a more ecologically, socio culturally and economically sustainable and equitable environment. By improving an area’s social provision, businesses can promote community development and empowerment, social cohesion, build capacity, and develop social capital (social networks and trust).

To learn more about how CACI can help your business improve its carbon and social impact, contact us today.

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