An Optimistic Perspective on ESG, Marketing, Innovation and Their Impact on Business

Tierra del Fuego (The Land of Fire) is part of Patagonia, a vast wild territory in South America. In Patagonia, the land of fire there is no fire: she breaths through her peaks and plains, forests and vegetation. She is the Land of Air unpolluted, of Water crystal-clear, of Earth protected and of Space. Pure space, property of all.

Patagonia is also a top successful company selling more than $1 billion worth of jackets, hats and ski pants each year, that was featured as top of the list by 𝐺𝑟𝑒𝑎𝑡 𝑃𝑙𝑎𝑐𝑒 𝑡𝑜 𝑊𝑜𝑟𝑘 and 𝐹𝑜𝑟𝑡𝑢𝑛𝑒 𝑀𝑎𝑔𝑎𝑧𝑖𝑛𝑒. Both publications cited Patagonia’s commitment to #sustainability and #socialresponsibility as a key factor in this recognition. This company is the Tierra del Fuego in Business, an ESG territory of transformation, ethics and trust.

This is a proof that any land of fire can transform. A proof that our entire Earth, that seems to be on fire, can transform. 

𝐇𝐨𝐰 𝐝𝐢𝐝 𝐏𝐚𝐭𝐚𝐠𝐨𝐧𝐢𝐚 d𝐨 𝐢𝐭? 𝐖𝐢𝐭𝐡 𝐭𝐡𝐞 f𝐢𝐞𝐫𝐲 𝐏𝐚𝐭𝐚𝐠𝐨𝐧𝐢𝐚𝐧𝐬!

The entire planet can take their example so as to become again breathable. Environment, Society and Governance are the key words epitomizing the actions. Patagonia's team - the founder, their executives and employees turned ESG factors into vectors of change. Patagonia is a case study per se, but in essence:

• They use recycled materials in their products
• They reduce dependence on virgin materials
• They continuously invest in renewable energy

ESG has been long ago proved to have a significant impact on a company's reputation, customer loyalty, commercial performance.

Brand Building Based on ESG

They are a proof that when ESG factors are incorporated, brands are better positioned to meet the expectations of consumers, investors and other stakeholders. Patagonians they have a clearly differentiated value proposition as compared to market competitors. The proof that this tale is no fantasy is reflected in their customer loyalty and increased customer base resonating with their global affiliation to sustainability and social responsibility. In 2019, Patagonia reported $1.1 billion in sales, an increase of 3.8% from the previous year. Better news are to come, as this trust leads to more trust, more loyalty, more support from customers, stakeholders, investors. What a fiery Tierra del Fuego!

ESG Brands Establish Themselves as Responsible Corporate Citizens

While 73% of consumers globally said they would change their consumption habits to reduce their environmental impact (Nielsen Survey), there is no official "top" of responsible citizens referring to brands.

Yet there are several organizations and initiatives that evaluate and recognize companies for their sustainability and social responsibility efforts - for example Dow Jones Sustainability Index (DJSI), Carbon Disclosure Project (CDP) or B Corp (a certification program for companies that meet certain ESG standards). These initiatives are again a clear proof that Patagonians have not remained alone.

Likewise, other leaders in sustainability practices that have chosen the change:

• Walmart implemented a range of energy efficiency measures across their stores, which led to a 28% reduction in energy consumption and $100 million in annual cost savings
• Philips implemented a closed-loop recycling system for their vacuum cleaners, which led to a 50% reduction in waste generation and a 20% reduction in production costs
• Danone set a science-based target to reduce their carbon emissions by 50% by 2030, which is expected to generate cost savings of €300 million
• H&M launched a clothing rental service in 2019, aimed at promoting circular fashion and tapping into new revenue streams.

Smaller Companies Have Their Big Times Too

• Aquacycl is a startup that develops and sells wastewater treatment systems that generate renewable energy. Their systems use a process called microbial fuel cell technology to break down organic matter in wastewater and convert it into electricity. They have new partnerships with craft breweries (to treat their wastewater and generate renewable energy from the brewing process) and with agricultural sector (their systems are used to treat wastewater from dairy farms and generate clean energy for on-site use).
• And Toms is a footwear company that has gained popularity for its "One for One" business model. For every pair of shoes that a customer buys, Toms donated a pair of shoes to a child in need. The program was closed in 2019, but the intention, the model and the possibility remains, with trial and errors natural along the way.

These are examples that incorporating ESG factors into business strategies can lead to commercial success. Companies that prioritize ESG factors are not only better positioned for long-term growth but also play a crucial role in creating a sustainable future. The Tierra del Fuego 'business path' is a prime example of this. It's a path that other businesses can follow to ensure they're operating in a way that benefits not only their bottom line but also the planet and society as a whole.

In a world where sustainability and social responsibility are becoming increasingly important, it's crucial for businesses to move beyond viewing ESG factors as buzzwords and instead integrate them into the core of their operations. This is how companies can create a positive impact on the world, while simultaneously driving commercial success.

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