Despite the challenges brands and businesses face with implementing ESG initiatives in a tough economy, and the current ESG backlash making things even tougher, new research from market research giant Ipsos shows that American consumers still expect the companies they do business with to make ESG a priority, with three in ten saying it’s more important for companies to focus on ESG than on consumer needs. So which brands and sectors do consumers think lead in environment, social and governance issues individually, and in ESG overall—and what are they doing right?
The firm recently unveiled ESG Watch, a new report that assesses public perception of company performance on ESG issues, acting as a benchmark for brands to measure their performance against, helping to determine whether they are seen on the right or wrong ESG track—and by whom. The inaugural report evaluates 30 companies and 6 sectors, reflecting a survey conducted with 3,000 Americans.
Google earned the highest combined score on ESG issues, indicating widespread favorable perception toward its historical performance and current momentum. Other top-performing brands included Costco (in second place) and Lowes (ranking third), with fourth and fifth place going to Visa and Apple, respectively.
The research indicates that citizens, consumers, employees, and investors increasingly agree that public and private sector organizations should improve both their internal governance and their external impact on the environment and society—a perception that can have an outsized impact on other key business metrics.
“ESG has captured the attention of citizens. The impact of the polycrisis and the perception that some institutions are failing (or not capable) in the new operating environment has raised the stakes for public and private sector organizations,” said Claire Hanlon, ESG country lead for Ipsos in the U.S., in a news release.
“While ESG considerations should be central to all decision-making, public perception of performance in these areas can be just as important,” Hanlon added. “Ipsos ESG Watch enables companies to understand how they rank so they can develop enhanced approaches to better align with public sentiment.”
The report offers an in-depth look at how public perception on ESG shapes brand value, along with other impactful sector-wide insights. In the inaugural report, the bank and investment sector scored highest for performance on environment issues, followed closely by the retail and tech sectors. The retail sector, however, ranked highest both for its impact on society, and in terms of ethical and law-complaint decision-making. Conversely, the oil and gas sector earned lowest marks on these dimensions.
“The wide variation in perceptions of company performance within sectors suggests that ESG can be an important source of differentiation,” said Lauren Demar, chief sustainability officer and global head of ESG for Ipsos, in the release.
“With 60 percent of Americans saying they ‘don’t know’ or hold neutral perceptions of how companies are performing on ESG, and 64 percent of global citizens saying they try to buy products from brands that act responsibly, now is the time for businesses to communicate their ESG initiatives and shape citizen-consumer perceptions—before they are defined for them.”