A mentoring session from nearly six months ago still sticks in the mind of Talita Ramos Erickson. When speaking with a recent business school graduate, Ramos Erickson was informed the fledgling professional wouldn’t even consider working for a business that didn’t show concern for its societal impact.
A clear message was sent: In 2021 “if you want the best talent, you’re going to have to do something so they’re proud to work for you,” said Ramos Erickson, general counsel (Americas) and CEO of Casa Barilla Restaurants. “You’re seeing a lot of employee activism, as well. … So, if you’re not doing things the right way, your employees will probably leave you.”
That sentiment was reiterated on a recent Food Institute webinar analyzing best practices regarding Environmental, Social, and Governance (ESG) initiatives for those operating food businesses. The event offered insights from multiple industry executives.
The topic of ESG is gaining relevance in 2021, in part, because consumers (not to mention young employees) are demanding that businesses act with a social conscience.
PANELISTS: TIME TO ACT WITH URGENCY
“There’s never been a more opportune time to consider ESG in business,” said William Hughes, the sustainability services lead in the U.K. for webinar sponsor Mazars. “If you consider the combined impact of COVID-19, increasing global equality, and climate change, we have no choice but to [reflect] on how and why we do business, and ask ‘Is there not a better way?’”
In short, Hughes noted, businesses can no longer afford to ignore environmental and social considerations. ESG is undeniably shifting global finance. Consider: according to the webinar panelists, approximately 70% of the world’s wealth – or $103.4 trillion — is governed by ESG principles.
ESG issues have long been a secondary focus for many food companies. In fact, the industry has largely trailed other sectors like energy and automotive. But, in the years ahead, the ESG agenda appears likely to take center stage as consumers, investors and governments demand accountability and compliance to a set of internationally recognized standards.
“Of all the stakeholders that a company can consider, the two that I would highlight as driving these changes are consumers and employees,” said Ramos Erickson. “A majority of American consumers are ‘belief buyers.’
“Either you tap into that, or you may end up in … ‘no-brand land,’ where people just don’t care about your brand.”
HOW TO START AN ESG INTIATIVE
The panelists, who acknowledged that starting ESG initiatives are never easy, provided the below tips for getting the process underway:
- Be bold from the outset and avoid timid, incremental steps
- Be authentic, carefully considering what makes sense for your company and industry
- Be transparent about ESG challenges, and map out how your business can overcome obstacles
- Be decisive, with an initiative spurred by company leaders who are fully on board
But, maybe more than anything else, it’s imperative to understand that your business may struggle to survive if it doesn’t embrace sustainability and have a social conscience. After all, that’s a non-negotiable for today’s younger generations. Consider: surveys show that 81% of Generation Z believes that brands are an essential part of addressing climate change and social issues, noted Sandra Noonan, chief sustainability officer with Just Salad.
“So, if you want to be relevant,” she said, “it’s important to acknowledge that a growing part of the U.S. population has this front and center when they’re making a decision about a brand.”