How is ESG Changing the B2B Buying Process?
ESG continues to rise up the agenda
Recent years have left many reeling from what feels like a constant state of crisis. The COVID-19 pandemic, resulting economic pressures, racial injustice, and climate change have all dominated the news agenda.
As a result, politicians, investors, the media and the public at large are reassessing the role businesses play in society, and whether they ought to be doing more. This reassessment is having a significant effect on how businesses buy and sell to each other.
Demand for ESG-focused investments is growing rapidly, with a record $120bn poured into ESG funds in 2021. Our recent ESG report suggests that those aged 18-34, set for an inheritance windfall over the next decade, are driving this shift, with nearly nine in ten (87%) having taken some ethical action in their consumer or investment behaviour.
Shifting priorities in the B2B marketplace
Businesses around the world are taking note of this shift in consumer attitudes. In 2021 we were met with an unprecedented wave of commitments and pledges from businesses seeking to burnish their credentials for this new generation of ESG-minded investors.
According to a recent KPMG study, 95% of large companies have ESG programs and 90% report on their progress.
But there’s growing evidence that ESG is having a much more profound effect on the business world, by changing how businesses buy and sell products and services.
According to a recent IDC survey, almost 60% of organisations in Europe included sustainability objectives in their RFPs, and more than half (56%) plan to dedicate at least 10% of their budget to sustainable products and services. These businesses are looking for suppliers that can help them do more than tick the ESG box. They need partners they can trust to do right by the environment, employees, and the community.
ESG becomes a key factor in purchase decisions
These are important emerging changes in the B2B buying process, and marketing and communications professionals seeking to influence these buying decisions need to have a firm grasp of the underlying trends and what they mean for B2B communications.
To understand the current state of the landscape, FleishmanHillard UK partnered with Opinium Research to conduct proprietary research among 450 UK business decision-makers. This new research explores the factors currently influencing buying decisions, the biggest pain points in the buying process, what content buyers look at when making purchasing decisions, and how much ESG influences the final verdict.
The findings confirm that ESG is fast becoming a key factor influencing purchase decision-making for B2B buyers. Over three quarters (76%) of decision-makers think companies should do more to communicate their ESG commitments publicly. Nearly as many (64%) said those that don’t do this risk missing out on business opportunities. And 2022 is shaping up to be a busy year for B2B buyers, with half (50%) saying they are currently considering replacing their current suppliers.
This research offers a glimpse into the priorities of today’s B2B buyers and underlines the importance of integrating your business’ ESG commitments into wider marketing and communications messaging. Putting out an annual report is no longer enough: continued and consistent communication across a variety of channels is necessary to stand out and thrive in a noisy environment.
Matthew Rudman, Associate Director