How To Attract Conscious Consumers To Your Business

ESG investing strategies—which include any investment approach that accounts for environmental, social, and corporate governance factors—have surged in popularity in recent years among retail and institutional investors. This trend mirrors the evolution of consumer behavior and the rise of what some have dubbed “conscious capitalism.” As younger generations (particularly Millennials) amass more spending power, they’ll continue to weigh brands’ ESG policies when making both long-term investments and daily purchasing decisions.

In fact, Nasdaq President and CEO Adena Friedman believes that this year marks the shift in conscious consumer behavior. “Last year, I predicted that 2019 would be a big year for the emergence of ESG, and there were real signs of progress—particularly as ESG decision-making rose to the board C-suite level across many industries,” she writes. “2020 is increasingly looking like it may be the ‘tipping point’ year for ESG investing.”

Brands that demonstrate a clear commitment to sustainability, positive social change, or responsible corporate governance (or all three) will benefit immensely from this changing paradigm. And those that don’t will fall by the wayside.

ESG Is Here to Stay

If you think ESG strategies are a corporate fad or market trend, consider this: about 70% of consumers would be willing to pay 5% more for alternative “green” products or services of the same quality, 70% of people want to know how brands are addressing social and environmental issues, 48% of customers would likely change their consumption habits to reduce their impacts on the environment, and almost half of companies that implemented sustainability programs aimed to capitalize on business and growth opportunities.

Today, many companies are capitalizing on those opportunities because of their efforts. Unilever, the parent company of the Dove and Axe brands, among others, developed a dishwashing detergent that uses significantly less water than its subsidiaries’ soaps. The company created Sunlight for water-scarce markets, and robust sales in those markets outpaced overall category growth by more than 20%.

Read more: forbes