Applying cultural transferability analysis to ESG

Understanding the cultures of the world is not easy, for three reasons:

1. Cultures are unconscious: It is “what remains when you have forgotten everything”. This makes it a challenge for researchers.
2. Cultures are in constant evolution: A previously minor element can become central over time.
3. Cultures are local and can be very different from one country to another – and even between ethnic groups within the same country.

For this report, we wanted to gain a better understanding of how cultural differences contribute to different awareness and priorities of ESG topics. So we carried out a curation exercise across a wealth of knowledge and information available – including Ipsos global survey reports, Ipsos Flair country deep dive reports, as well as secondary research examining particularities about our case study countries. We also worked with local market champions, who are both cultural experts and ESG champions, and who provided us with bottom-up insights.

Three cultural dimensions

Studying the patterns, history of practices, types of ESG initiatives, popular sentiments and political policy, we identified three cultural dimensions that are shaping attitudes, perceptions and behaviour around ESG in the local markets. Our analysis points to a huge variance in how the priorities land within ESG and what is likely to drive investment into ESG related initiatives.

1. Relationship with nature

This surrounds how each culture sees the juxtaposition of humans with nature.

• Conquest: Many of the western, developed cultures have a common history of having conquered nature to drive their early progress – whether it be conquering frontiers, taming wilderness or even an outdoor culture and lifestyle. Many also have history of conquest over indigenous populations – these days seeking to remedy this with affirmative action. And in some of the countries bestowed with natural bounty (e.g. Australia or Canada), the commercial pressures of extractivism contribute to this sense of mastery. The approach to ESG therefore is an interventionist one, almost as if to say, “we created the problem and now we will fix it.” (e.g. US, Australia)
• Co-existence: Many of the affiliative, even tribal cultures view nature with some reverence. Nature is seen as some form of bestowal of goodness and richness, to be treated with respect and care. There is a belief of interconnectedness with nature, characterised by rituals of worship and celebration. Many of these cultures also have sustainable indigenous habits surrounding the use of natural/ bio-degradable materials, conservation and reducing waste, and collective responsibility for welfare and community support for their people. We also see many of these cultures resort to extractivism for commercial purposes, justifying it as another permissible bounty of nature. It is when they see symptoms of this bounty being compromised that there is active concern about the finiteness of natural resources. This was the case in Brazil, when unprecedented wildfires brought so much smoke to São Paulo that the sun was completely blocked out and the city was plunged into almost nightlike darkness. More than all discourse, this spurred investment into ESG priorities for Brazilians. There is a compensatory approach to ESG – of appeasement and worship – to seek continued benevolence and abundance of nature. (e.g. India, Brazil, Indonesia)

2. Responsibility

Perceptions about who has the best agency to drive impact and make a difference.

• Individual/personal: Individualistic cultures take on a personal onus to make a difference in any small way, believing it is as much a matter of choice as it is a duty. Some of this also comes from a sense of guilt for past excesses with nature, a need to undo the wrong for the future generations. The importance for personal conviction is also high, with a need to be seen to ‘live’ the beliefs and action. Most of these cultures recognise the growing finiteness of resources, adopting behaviours of conservation and even sacrifice. This also results in a strong sense of guilt – tension arises when there is clash with aspirations, personal growth/ success, lifestyle (e.g. having kids, holiday travel, owning cars) especially among Gen Z (US, Europe), declining birth rates (most developed countries), consumer choice apps to pick only sustainable brands (e.g. Australia).

Most of these cultures recognise the growing finiteness of resources, adopting behaviours of conservation and even sacrifice. This also results in a strong sense of guilt – tension arises when there is a clash with aspirations, personal growth/success, lifestyle.

• Institution: Collective cultures, however, view any action as the prime responsibility of institutions. There is strong association of the environmental discourse with western/ developed countries – and a feeling that some of the obsession with environment/climate is alarmist and impractical. With the high clutter of ESG messaging, these cultures are well aware of the need to be more mindful of the environment. But they also see the benefit of progress from modernisation and extractivism and value the livelihood and prosperity it brings to more people. And in this context, it helps to delegate the responsibility of the more urgent imperatives to the institutions. These cultures believe that to make true impact, there is a need for collective action, individuals being seen to have limited agency. An example of how this works is in the adoption of the European standards of pollution control and limiting emissions for the automotive sector. Compliance here is seen as not only being kinder to the environment but also as a way of making their manufacture acceptable for developed export markets – aiming for not just eco prudence but also commercial benefit. They therefore look to the government and business to lead the way. There is a strong implication for partnerships with business and policy action from government (e.g. Clean India Mission or the Sustainable Development tracker in Brazil). 

3. Rewards

This surrounds the kind of benefits that successfully motivate action on ESG. 

• Benefiting the world (long-term benefits): Among the more developed, western and individualistic countries, the need to act is driven by benefits that they may or may not see in their lifetime – but that will improve the world and leave it in a better state for future generations. This assuages a sense of duty and responsibility with a strong skew to the environmental – mainly around issues like global warming, climate change and resource conservation. All of this needs conviction and commitment to long-term benefits, which are rarely experienced immediately and personally. (e.g. US, many European countries, Australia)
• Benefiting my world (short-term benefits): Among the developing countries, there is a need to ‘catch-up’ economically with the developed countries, with what they believe as their own full potential. So giving up immediate benefits for an unseen future purpose feels impractical and also unfair. They see developed countries having extracted all such benefits before deciding to ‘reform’ themselves, putting the developing markets at an unfair disadvantage. Bigger problems around poverty, access to healthcare, and livelihood feel more urgent, and not to be sacrificed for environmental action. There is also a lot of emphasis on the social collateral of some of the environmental action – where human issues are seen as equal or even more important than environmental issues. Motivation to adopt ESG practices in these cultures is spurred only when they see benefit in a more immediate and personal experience – improving my world rather than the world. When ESG benefits also mean benefits that impact a person’s life, their health/wellbeing, their family or the people around them, they are more motivating and effective. For instance, in India several studies conducted to introduce water-saving products on homecare always get rejected for concerns on functional efficacy. (e.g. most emerging economies, China – where the impact is on personal health).

The following cultural analysis is a synthesis of all this research. Mapping our case study countries on to these three dimensions illustrates the need to take a unique, tailored approach to advancing ESG topics within each country (Figure 16 previous page). We also see cultural differences emerge through the choice of language people use to speak about ESG in each country (Figure 17).

Table of contents

1. ESG across borders: the cultural context
2. "Sustainability": All on the same page?
3. Equality Kaleidoscope
4. The climate of climate change opinion
5. Applying cultural transferability analysis to ESG
6. ESG across borders: United States of America
7. ESG across borders: India
8. ESG across borders: Brazil
9. ESG across borders: South Africa
10. ESG across borders: China