ESG (Environmental, Social, Governance) is now seen by business leaders as intrinsically linked to a company’s future success1. Our most recent survey of MPs and business journalists shows how these key stakeholders perceive the importance of each element in ESG, how consumer companies including supermarkets, fashion and FMCGs (fast-moving consumer goods) are performing on them, and which areas are most important for businesses to focus on.
There is a large variation in how well different sub-sectors’ efforts to address ESG issues are viewed amongst stakeholders. Supermarkets rank in top place for MPs (47% rank the sector’s ESG efforts as strong) and business journalists (38% strong), while FMCGs rank much lower for MPs (12% strong) than for business journalists (31% strong), and fashion ranks among the worst for both MPs (7%) and business journalists (10% strong). There are also differences in perceptions as to which elements of ESG take primacy; although both MPs (73%) and business journalists (51%) see improving society as the most important aspect for the consumer sector, they highlight different key issues for priority across the three ESG pillars.
Most of the MPs (73%) and business journalists (51%) we interviewed view social issues as a key focus area for the consumer sector, and many of these stakeholders also highlight that they are “very aware of the issue that we have in the world with plastics and their use of packaging on products” (Conservative backbench MP). Many UK supermarkets, for example, were making headlines for trialling ‘packaging-free’ sections in stores2, and with the onset of the COVID-19 pandemic and first UK lockdown in 2020 established, supermarkets adapted quickly to boost online delivery and provide priority slots for the elderly and vulnerable. Widescale and well-communicated efforts like these about how they are proactively addressing environmental and social issues had a hugely positive impact on supermarkets’ reputation with these influential stakeholders.
Conversely, fashion ranks as the worst sub-sector for business journalists (72% rate its ESG efforts as weak) and the second worst for MPs, beating only the mining sector (57% rate its ESG efforts as weak). As highlighted in a previous article, issues such as; pollution, poor working conditions and overproduction, were typically associated with the fashion industry as companies face pressure to produce clothes faster and cheaper than competitors. MPs and business journalists also see poor working conditions as a crucial issue for fashion companies to address. As one national journalist outlined, they would like to see such companies “making sure that no people are suffering so us in the West have cheaper clothes”. Likewise, a Labour MP reaffirmed that “if your dress is cheap or a consumer item is cheap, it might have been produced through child labour or slavery or an exploited community. Whilst people do want good value for money, more and more want to know if that value for money has come at someone else's expense”. While fashion companies are under pressure to provide value for money, balancing this with their ESG performance is a key challenge that they must not lose sight of to manage their reputation.
Interestingly, business journalists rank FMCGs as the third best performing sub-sector for its ESG efforts (with 31% rating these as strong and 25% as weak), compared to MPs who see it as the third worst performing sub-sector, just above fashion (12% rate ESG efforts as strong and 23% weak). Environmental issues like plastic packaging, pollution and waste are highlighted by many MPs in relation to this category, perhaps explaining the sector’s poor rating with this group. One Conservative MP said they have “real concerns about how FMCGs and the like are produced and where they are produced. We need to move from a throwaway society”. Since Ipsos’ Tetra Pak Index 2021 shows pollution and plastic litter in the ocean are the joint top environmental concerns (83%) for consumers too, packaging and production are clearly an important area to focus on.
While business journalists raise the same issues, they also highlight recent ESG improvements, and feel the FMCG sector can lead further environmental progress. Referring to social issues, one national journalist clarified that “a year or two ago I would have said things like child labour and slavery and that is very important obviously, but a lot of the big FMCG companies have got better safeguards in place”. Environmentally, many believe the sector has an important role to play in helping consumers reduce their impact on the planet. One national journalist believes that “given we are all consumers, whether we are doing it online or are driving to the shops, the retail, consumer, FMCG sector is a huge part of our environmental impact on the world. [Those companies] could potentially have as big an impact as airlines and mining companies combined, in changing our behaviours as consumers towards a lower carbon footprint”.
Consumer companies’ ESG efforts can have a substantial impact on their reputation amongst MPs and business journalists. MPs, business journalists and senior corporate affairs professionals in Ipsos’ Reputation Council concur that ESG is important for investors (76%), legislators (80%) and customers (55%). In Ipsos’ most recent survey of MPs and business journalists, clients were able to unpick the finer details of how best to communicate their ESG work, as well as track their organisation’s ESG performance relative to their competitors. This helped them gain a better understanding about where they should focus their attention on to improve their ESG performance, and by extension improve their favourability amongst influential stakeholder groups.
- More information about our MPs and business journalists syndicated survey is available. Please get in touch below.
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