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Purpose Pays: The Business Case For ESG Adoption

The Business Use Case For ESG Adoption
Exploring the Business Case for ESG

The way companies take responsibility for their consumer and environmental impact has undergone a vast transformation. It has become more purposeful, driven by intent and accountability. For example, in 2017, Google reached a remarkable milestone of matching 100% of its operational energy consumption with renewable resources. By 2020, Unilever, a consumer goods giant, had ensured that 75% of its factories

generated zero non-hazardous waste for landfill. And according to Deloitte, over 90% of businesses increased their sustainability investments in FY 2023-24.


However, with ESG adoption picking up pace, growing businesses need more than social value to rely on. While the first two decades of this century have marked a conscious, value-oriented approach to Environmental, Social, and Governance (ESG) factors, the future hinges on the business impact of these factors. ESG is no longer just a scripture of morality or ethics, but a strategic playbook that delivers real-world impact and returns.


So, how do we make the business case for ESG? Let’s find out.


  1. ESG is a green light for improved top-line

ESG is increasingly linked to stronger revenues and better market access. When brands demonstrate social credibility and environmental responsibility, they build consumer trust, and that trust translates to sales.


Take Unilever’s dishwashing liquid brand, Sunlight, designed to use less water. It saw sales grow over 20% faster than the category average in water-stressed markets.

Source: McKinsey


It’s not just customers. Governments and regulators are more likely to award contracts and licenses to businesses that demonstrate strong ESG credentials. Tata Motors, for instance, aligns with global ESG benchmarks in its EV journey, which enhances its eligibility in international markets, especially Europe.


  1. Savings that save the planet

Effective ESG implementation can lead to substantial cost savings. McKinsey's research analysing resource efficiency (energy, water, and waste used in relation to revenue) found a significant correlation between resource efficiency and financial performance.


ESG helps combat rising operating expenses, such as raw material costs and the true cost of water or carbon, which can impact operating profits by as much as 60%.

Source: McKinsey


Companies that had advanced their sustainability strategies the furthest performed particularly well. 3M, for instance, has saved $2.2 billion since launching its "Pollution Prevention Pays" (3Ps) program in 1975, preventing pollution upfront through product reformulation, improved manufacturing processes, equipment redesign, and waste recycling.


Another example is FedEx, which aims to convert its entire 35,000-vehicle fleet to electric or hybrid engines; by 2019, 20% had been converted, resulting in a reduction of fuel consumption by over 50 million gallons.


  1. A green flag in terms of regulations and compliance

Across the globe, climate and ESG disclosures are tightening with mandates such as the EU’s CSRD, the SEC’s climate rules, and California’s SB 253/261, which require companies to report Scope 1, 2, and even Scope 3 emissions.


In India, SEBI has made ESG reporting mandatory for the top 1000 listed companies through the BRSR framework, effective from FY 2022–23.


Companies with strong ESG assessments already conduct a thorough performance check for compliance and tend to face fewer penalties and compliance issues. For instance, Tata Steel’s BRSR outlines a proactive climate action plan aligned with SBTi targets. That not only prepares the company for future carbon regulations but also signals to regulators that the company is taking responsibility seriously, creating room for operational flexibility and goodwill.


Global regulations around ESG aren’t expected to slow down anytime soon, as the climate threat is very real. We operate in markets that are highly and increasingly sensitive to carbon footprint and social responsibility, making sustainability a ticking clock for businesses with poor ESG practices.


  1. Transparency seeds trust, and trust nourishes business growth

In a market driven by perception and proof, transparency is currency. Companies that openly share their ESG goals and progress build deeper trust with investors, regulators, customers, and even employees.


Take Nestlé, for example. In its 2022 Sustainability Report, it became the first food and beverage giant to benchmark its entire portfolio using the Health Star Rating system, revealing that nearly 60% of its products met healthy standards and publicly sharing its path to address criticisms by refining its nutrition reporting.


Additionally, Nestlé engages one of the world's top consulting firms to provide independent assurance on 13 key ESG metrics, including emissions, regenerative sourcing, and water use, thereby enhancing stakeholder confidence in its data. That level of openness signals accountability and builds trust with investors, consumers, and regulators alike because those who show their work earn the credit.


  1. Today’s generational choice, tomorrow’s sustainable legacy

Purpose isn’t a perk today, it’s a priority. Today’s workforce is going beyond scanning salary packages; they’re scanning sustainability reports.


70% of respondents in a study consider a company’s environmental policies important when evaluating a job offer, and 23% have already researched this before accepting a role.

Source: Deloitte


That’s one of the main reasons why Unilever’s consistent top ranking as a global employer reflects how purpose is woven into its business practices. According to McKinsey, companies that publicly report their diversity, Equity, and inclusion (DEI) efforts, social impact, and sustainability targets tend to experience lower attrition rates and better employee engagement.


ESG-driven cultures are not just beneficial for teams. They’re crucial for the bottom line.


Beyond the buzz words: ESG means business

So, as you can see, the case for ESG rests on both: sentiment and strategy. It boosts revenues, trims costs, reduces compliance risks, builds reputation, and attracts top talent. However, beyond these measurable wins, ESG also prompts businesses to reimagine their operations, strengthen their supply chains, and future-proof their growth.


With regulations evolving and stakeholder expectations rising, ESG is fast becoming a boardroom priority. Those who approach it as a long-term strategy, rather than a short-term campaign, will stand out in crowded, competitive markets.


And as more businesses adopt ESG frameworks, the real differentiator will be how clearly and credibly they communicate their efforts. That’s where clarity, consistency, and a strong content partner can make all the difference.


Because the story you tell around ESG isn’t just a narrative, it’s a signal. To investors. To employees. To the future.


Want to create detailed ESG reports and communicate your ESG wins effectively? Reach out to us to craft the compelling narrative that your efforts deserve.

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