ESG compliant firms 'more profitable' says Bain & EcoVadis

Study from Bain & EcoVadis suggests firms that prioritise ESG are more successful, and that those with more senior female execs also perform better

New in-depth research suggests that companies that prioritise ESG are more profitable. 

The study claims organisations that focus on ethics, environmental and labour practices within their supply chains have margins 3-4% greater than those that don’t.

The research was commissioned by global management consultancy Bain & Company and EcoVadis, a provider of sustainability ratings.

Called Do ESG Efforts Create Value? It also suggests that ESG-compliant companies have higher employee satisfaction and that firms with more women at board level perform better than those with fewer.

The study was based on how thousands of private companies’ EcoVadis sustainability Scorecards compared against their financial performance. 

It found a correlation between advanced performance on key sustainability topics and stronger profitability and faster growth.

Most of the 100,000 EcoVadis-rated companies – 80% of which are private – are engaged in supply chain relationships. 

EcoVadis says this has “strong implications” for procurement teams.

A spokesperson said: “In addition to mitigating risk and complying with due diligence regulations, using ratings in sustainable procurement programs is a vital lever in building financial success and resilience of their value chain partners.”

Below are some headline findings from the report. 

The report claims companies with more senior women execs have stronger financial results.
Sustainable procurement leaders are more profitable, the Bain/EcoVadis study suggests.

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