Sustainability has long been more than just a voluntary option - it is a key factor for corporate success. Laws such as the Corporate Sustainability Reporting Directive (CSRD) and the Supply Chain Sustainability Act (LkSG) make ESG measures mandatory.
With the Omnibus Regulation, the EU is now planning to relax some of these requirements: Fewer companies will be subject to the CSRD, reporting obligations will be simplified and deadlines postponed. But one thing remains clear: ESG is far more than justcompliance.
89% of Germans alone demand sustainable business practices from companies¹, and it is clear that sustainability offers economic benefits. Companies that ignore ESG are at risk:
- Fines,
- Financing problems,
- Competitive disadvantages
- and loss of trust.
Sustainability as the key to financing and investments
Financial institutions increasingly consider ESG criteria to be crucial for lending. According to a study, 38% of banks already take ESG risks into account in their lending processes ². A KfW survey shows that a quarter of companies were asked about climate protection during loan negotiations ³.
Investors are also increasingly focusing on ESG: almost 80 percent state that ESG activities of companies are becoming increasingly important when making decisions for or against investments. 83 percent expect reporting on progress towards ESG goals. Almost half (49%) would even disinvest if a company does not take sufficient ESG measures ⁴.
ESG reduces costs and increases efficiency
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An analysis by the Harvard Business Review shows that 88% of companies with an ESG strategy achieve better operational performance ⁵.
36% of companies expect significant savings from sustainability measures in the next five years ⁶.
A study by the University of Oxford (2015) of over 200 studies, industry reports and books found that 88% of sources confirm that sustainable companies are economically more successful and achieve higher cash flows in the long term ⁷.
Customer loyalty and market advantages through sustainability
59% of companies are under increasing pressure from customers to operate more sustainably ⁶. A commitment to sustainability not only strengthens trust, but also increases willingness to pay:
- 80% of consumers would pay more for sustainable products ⁸.
- 64% name sustainability as one of the top 3 purchase criteria ⁹.
According to an LBBW study, companies that operate sustainably benefit from better image values and generally higher margins ¹⁰.
These benefits are also reflected in business results: Companies that implement sustainability standards benefit from measurable sales and marketing-related advantages ¹¹.
ESG as a factor for employer attractiveness
Sustainability is also a decisive criterion for employees. Three out of four employees want a sustainable employer ¹², 83% rate environmental awareness as just as important as the company's success ¹³.
This is also evident in the job market: over 60 percent of Germans state that information on sustainability in job advertisements or on career sites is a particular incentive for applying for a job. More than half say that environmental protection and sustainable action is one of the three most important incentives when deciding for or against an employer ¹³.
Conclusion: ESG is not a cost factor, but an investment in the future
Those who see sustainability only as a duty are missing the opportunity to use ESG as a real competitive advantage . Companies that invest in ESG today are securing
- better access to capital,
- lower operating costs,
- a strong market position
- and an attractive employer brand.
A study by Workiva with over 1,300 ESG experts from 13 countries shows: 70% see positive effects on cost savings, customer acquisition and investor relationships as well as the retention of insurance companies, credit agencies and customers through their ESG reporting. 75% consider technology to be essential for the efficient collection and management of ESG data ¹⁴.
Planted helps companies to implement their ESG strategies in a centralized and automated way within their AI-powered ESG platform - from planning to audit-proof reporting.
Learn more in a free demohow ESG can help your business.
Sources:
² https://www.der-bank-blog.de/neue-herausforderungen-nachhaltigkeitskriterien/firmenkunden/37700923/
⁴ https://www.pwc.de/de/nachhaltigkeit/glo bal-investor-esg-survey.html
⁵ https://hbr.org/20 16/10/the-comprehensive-business-case-for-sustainability
⁶ https://www.deloitte.com/content/dam/assets-shared/docs/about/20 24/deloitte-2024-cxo-sustainability-report.pdf
⁷ From the stockholder to the stakeholder: How sustainability can drive financial outperformance, University of Oxford and Arabesque Partners, 2015
⁸ https://www.pwc.com/gx/en/news-room/press-releases/20 24/pwc-2024-voice-of-consumer-survey.html
⁹ https://www.simon-kucher.com/en/who-we-are/newsroom/simon-kucher-unveils-20 24-global-sustainability-study-majority-willing-pay-more
¹² https://www.stepstone.de/e-recruiting/wissen/nachhaltigkeit
¹³ https://presse.koenigsteiner.com/wp-content/uploads/2021/02/Whitepaper-Jobfaktor-Klima.pdf
¹⁴ https://www.workiva.com/sites/workiva/files/pdfs/esg-reporting-global-insights-full-report-en.pdf
