How ESG Data Can Help Retailers to Boost Profit Margins in Inflationary Market

Pressure in the retail industry is increasing around Environmental, Social and Governance (ESG). The future of retail—and customer buying choices—is being shaped by a potentially causal relationship between ESG claims and sales performance.

Gartner defines ESG as “a collection of corporate performance evaluation criteria that assess the robustness of a company’s governance mechanisms and its ability to effectively manage its environmental and social impacts.” One of the driving forces behind ESG is that institutional investors and boards look to sustainability and social responsibility disclosure information to explore the relationship between ESG risk factors and business performance.

Despite this, the key trend for retail CIOs in 2023 is the link between ESG and customer spending. GlobalData’s Q1 2022 consumer survey found that almost two thirds (63%) of consumers’ purchasing choices are influenced by more ethical or environmentally friendly products. As such, how retailers manage data insights across their enterprise will determine whether ESG is a tool to improve margins or a force for reputational damage.

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