ESG: From a buzzword to opportunities galore for firms

IMG Kenya CEO Peter Gacheru. [Courtesy]

On September 12, Apple took to the stage to introduce the World to its new line of products.

While the technological innovation and software upgrades were meant to be the highlight of the pre-recorded digital launch, the underlying theme of sustainability and equality stole the show.

The launch hit the three pillars of Environmental, Social, and Governance (ESG) from different angles, tactfully utilising both direct and subliminal messaging.

The message was simple: Apple is a sustainable, environmentally conscious, equal-opportunity employer and is taking the lead in driving climate change initiatives.

The Environmental pillar of ESG was the overriding theme of the launch with subliminal cues hit through panoramic views of Apple's solar-roofed headquarters. Apple directly spoke to this pillar throughout the launch of various products, unveiling its first carbon-neutral product - the Apple Watch Series 9.

Each of the other devices had carbon neutrality above 70 per cent on account of the selection of materials, including recycled aluminium casings, and the elimination of both leather and plastic alongside recycled cobalt batteries.

"For the first time, customers can choose a carbon neutral option of any Apple Watch, representing a significant milestone toward Apple 2030... Our goal is for Apple and all the products we make to be carbon neutral by 2030, reducing our total carbon emissions to no more than 9.6 million metric tons-at least a 75 per cent reduction against our 2015 baseline," The company noted in its post-launch statement.

The social pillar of ESG was subliminally tackled through the manner of presentation. Apple's launch had nine presenters, including its CEO Tim Cook.

Of these presenters, five were women in top management positions, while three were of African or Asian descent.

The launch's subliminal undertones of diversity extended to its presentation with adverts featuring both Asian and African American models alongside snippets of religious actions such as prayer.

The imagery also included black aviators on product screen displays, sending a picture of a diverse company with equal opportunity for all.

The Corporate pillar of ESG piggybacked off the social pillar with the titles of the five female executives and three people of African American and Asian descent showcasing diversity and equality at the top management level.

The launch was tailor-made to showcase Apple's vision of a sustainable and inclusive future.

While many communication and marketing experts will be quick to point out the underlying themes of the launch, few will point out the opportunity and change in perspective that companies must now adopt.

It would not be feasible to expect all companies, especially those involved in industrial production to unveil carbon-neutral products.

The fact is, Apple has the luxury of cutting-edge technological innovation, capital and a diverse supplier network to feed its carbon-neutral ambitions.

Two, Apple sells a near-niche product with price points well above the average consumer's purchasing power. The company can, therefore, spend on research and development of carbon-neutral products and expect to sell them to their near cultic customer base.

On the other hand, most companies can hardly afford to spend on or dedicate resources to research and development of inputs that can lead to carbon-neutral products.

This is, however, not to say that companies should not follow in Apple's footsteps. For Apple's progress to bear real fruit, its model must be easy to replicate and adopt. So where is the opportunity?

As illustrated by Apple, the drive towards carbon neutrality is heavily reliant on recycling materials and green energy.

Therein lies that opportunity. Countries in the Global South hold millions if not billions of old devices that if harnessed could turn countries like Kenya into a future source of materials for giants such as Apple.

Investment in developing recycling plants and material recovery will enable countries such as Kenya to take advantage of new opportunities within the green economy.

Companies should look to tap into the supply chain being built by frontrunners like Apple to hasten the drive towards the production of carbon-neutral products.

Frontrunners also have a social responsibility to make available processes, procedures, knowledge and supply networks that enable the production of carbon-neutral products. Failure to do so is to dilute their own gains with wider industrial emissions while opening up their old less carbon-friendly networks to other players to take their place. The question is who will capitalise on these opportunities?

The author is CEO IMG Kenya