ESG and DEI are in the spotlight

One fascinating finding from the latest Momentum ITSMA Client Buying Index (CBX), that has stimulated a lot of attention, is the data around ESG (Environmental Social Governance) and DEI (Diversity Equity Inclusion).

Summarising a key finding, the latest CBX data found that – for more than half of the 370 large enterprises in our sample – ESG and DEI now rank as must-haves. Indeed, for a significant number, ESG and DEI credentials form part of the set of factors assessed when making a buying decision.

Presenting the findings to a Momentum ITSMA member organization this week, I was asked a couple of interesting questions, which I will share below. I’m intrigued to hear other people’s take on these – so please share your thoughts!

ESG v DEI

The first question related to the fact that ESG seems to carry more weight in buyers’ minds right now than does DEI – why is this? Why does ESG currently overshadow DEI? My hypothesis was that DEI (at least under that name) is a newer phenomenon than ESG and that explains why it lags (albeit only slightly) in prominence.

The second question related to regional variations, given that CBX is a global piece of research. The hypothesis here was that attention to ESG and DEI would be highest in EMEA, with North America rapidly catching up, but APAC slightly behind.

The data, though, does not fully support that hypothesis. When we asked enterprise buyers if ESG was a deciding factor for which solution providers they included on a shortlist, 44% in North America said yes, compared to 33% in EMEA and 32% in APAC. A similar question but this time about DEI said this was a deciding factor for 34% of North American companies, 25% of EMEA and 22% of APAC.

So, it would seem these themes have more valency in North America than elsewhere. I’m interested to hear if these statistical averages match people’s actual experiences. Please join the conversation!

The dangers and pitfalls

The member organization I was talking to have just put their entire team of sales reps through training specifically on these issues. They have a good story to tell and want to make sure their sales reps can talk the talk. They realise that ESG and DEI are live topics when it comes to purchase decisions and are investing accordingly. A pretty smart move on their part, in my view.

There are dangers lurking here, of course. We’ve all heard about greenwashing and need not to get sucked into that trap.

In fact, one of the most popular topics of conversation at this year’s Marketing Leadership Forum was the undoubted fact that, like it or not, businesses are becoming more political and having to engage with social issues. But this can backfire – the example cited most often at MLF was the beer company Anheuser-Busch.

Anheuser-Busch marketing partnered with a transgender influencer. This prompted a consumer backlash in certain quarters, with threats of a coordinated consumer boycott. At which point, Anheuser-Busch backed down and pulled the marketing. An article in Forbes called this “a textbook example of what not to do”.

The point here is this – could something similar happen in the B2B world? What would happen when your values and purpose are suddenly in conflict with your commercial imperatives. Do you stick to your principles or do you back down?

My hunch is that B2B companies will increasingly face this issue in the next few years. Best get ready!

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