Per this article on a Bain & Company and EcoVadis study of 100,000 companies, of which 80% are private, ESG activities (sustainability, diversity and employee satisfaction) correlate with stronger financial performance and growth for private companies:

 

  1. Companies with more women on the executive team have better financial results.Companies that rank in the top 25% of their industry for executive team gender diversity have annual revenue growth approximately 2 percentage points above that of companies in the bottom quartile. And their EBITDA profit margins are 3 percentage points higher than that same group.

 

  1. Renewable energy usage correlates with higher EBITDA margins in carbon-intensive industries. In the natural resources, transportation and industrial goods sectors, companies that use more renewable energy have higher EBITDA margins.

 

  1. Companies that focus on ethics, environmental and labor practices within their supply chains are more profitable. These companies have margins 3 to 4 percentage points above those that don’t focus on their suppliers’ ESG credentials.

 

  1. ESG leaders have higher employee satisfaction; companies with the most satisfied employees grow faster and are more profitable. They have three-year revenue growth up to 5 percentage points above those with less-satisfied employees and margins as much as 6 percentage points higher than those laggards. Beyond the basics of fair pay and ensuring a safe work environment, benefits may include career training, mental and physical healthcare, childcare, and educational opportunities, all of which boost employee satisfaction and, as a result, productivity and retention.

 

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