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Our research shows customer purchasing decisions are increasingly influenced by an organisation’s Environmental, Social and Governance (ESG) agenda, despite some of the more recent challenging headlines. The results of our latest UKCSI show a direct correlation between an organisation’s positive social stance and its appeal to consumers – and therefore, its chances of long-term financial success. The rise of ethical investing and the high cost of getting it wrong has led to ESG moving up the priority list for many leaders as yet another critical area to manage in an increasingly complex and interconnected environment.

Historically ESG – or the ES bit at least – often grew out of an organisation’s CSR approach, but this has evolved in recent years. There is now a greater expectation from customers for organisations to do the right thing more broadly and to place this at the heart of their business practices. It’s no longer a competitive advantage but an expectation that well-run organisations are addressing their position on creating a sustainable business model as part of business as usual. This includes ethics, commitment to long-term sustainability and acting in the interests of customers, employees and wider stakeholders. Recent events have brought Social and Governance factors to the fore again and increased consumer pressure on businesses perceived to be acting contrary to the values of their customers. Authenticity and action are critical – if you’re talking about it, you need to be demonstrating it.

It’s therefore timely – a year on from the launch of our breakthrough Green Agenda research – that we remind ourselves of the key takeouts. At the most basic level, consumers are ever more aware of the impact of an organisation’s activities on the environment – a fact exacerbated by the rising cost of fuel forcing us to consider how we use energy across all aspects of our day to day lives.

Customers are looking towards organisations to give helpful, practical solutions to the problems we face – and, where possible, provide simple and easy actions that we can all take to reduce our carbon footprint. We need to be clear about what our organisation is doing, why the change is necessary, and the impact on employees, customers, and stakeholders, – with the leadership taking visible ownership of the sustainability agenda.

When it comes to Governance, the expectation is that an organisation’s board steps up and takes responsibility. Some businesses still overpromise and under-deliver, and as consumers, we are far less sympathetic than we were.

So what can organisations do to harness their ESG agenda to improve customer satisfaction? It is a given that customers expect organisations to comply with legal and regulatory responsibilities. They are looking toward transparent communications about the sustainability credentials of their products, supply chains and operations. This requires business leaders to hold themselves accountable across all levels of their organisation – showing a commitment with clear targets and objectives.

People’s expectations have evolved, and consumers are increasingly looking beyond a business’s day-to-day operations for guidance on how they can be more sustainable in their purchasing decisions. They are also looking for organisations to remove themselves from relationships and supply chains that are not supporting their purpose – so this is not a short term initiative but a way of being.

Those organisations that can guide and support consumers through their customer service initiatives set themselves apart from competitors, and this will positively impact customer satisfaction.

The ESG agenda will keep evolving, and organisations will need to adapt. Spinning multiple plates to keep customers satisfied is a continual challenge, but a strong, well-articulated and well-communicated ESG approach can underpin robust business performance in the long term.

Jo Causon

Jo joined The Institute as its CEO in 2009. She has driven membership growth by 150 percent and established the UK Customer Satisfaction Index as the country’s premier indicator of consumer satisfaction, providing organisations with an indicator of the return on their service strategy investment.

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