Leger’s annual Reputation study, known for its in-depth analysis of factors influencing corporate reputation, was released last month with an added focus on Environmental, Social, and Governance (ESG) priorities. Looking at ESG as a new reputational influencer reflects an increased understanding of the profound impact of environmental and social factors on corporate identity and consumer trust.
The COVID-19 pandemic initially led to a decline in ESG initiatives among Canadian companies that prioritized immediate survival and safety. However, there are strong signals of a broader societal return to valuing corporate citizenship and sustainability.
Companies are strategically aligning their purpose beyond profit with demographic shifts and market dynamics, particularly to attract Millennials and Generation Z. These generations, the workforce of tomorrow and powerhouse consumers, are increasingly favouring companies that commit to sustainable and responsible business practices.
“We can all see this generation is different and looking for companies that share their values and principles,” said Lisa Covens, Senior Vice President at Leger.
Beyond employee retention and consumer expectations, the study acknowledges an additional fascinating driver of Canadian ESG adoption: consumer sentiment that corporations compensate for government failure to address growing environmental and social issues.
The study also showed that, unlike other corporate reputational influencers that are consistent across industry lines, when it comes to ESG, consumer opinions on where companies should focus their efforts are sector-specific. For example, consumers wanted:
- Automotive, brewery, and energy sector businesses to focus on reducing their carbon footprints;
- Accounting, management, and real estate to focus on equity, diversity, and inclusion; and
- Financial institutions and social media companies to invest in social equity, such as educational initiatives.
With measurement at the core of an effective and transparent ESG strategy, public and private companies of all sizes can use Leger’s reputational insight to help identify opportunities and proactively address risks. “Make sure to have a baseline reputational study,” said Covens. “This proactive approach helps identify and understand reputational changes and allows companies to over time address issues before they escalate.”
The 2024 Leger Reputation study marks a pivotal moment for B2C and B2B companies engaged in image management. Above all, it confirms that corporate reputation and environmental and social responsibility are now inexorably linked.
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