ESG Investing in the Athletic Footwear Industry: A Guide for Investors

ESG has emerged as the top theme among athletic footwear industry companies to bolster a healthier planet and boost governance. Footwear manufacturers have realized the upsides of aligning with environmentally friendly production methods. Venture capitalists, investors and other stakeholders are emphasizing shoe design, manufacturing and supply chain that conserve energy, reduce negative environmental impacts and are safe for consumers, communities and employees. Recycling of footwear, solid waste recycling, CO2 emission, social responsibility and use of renewable energies could be pronounced to propel ESG performance. 

An uptick in ESG adoption and evolving business strategies have encouraged investors to use sustainability as an engine of growth. Investors recognize that companies with sustainable credentials could outperform their rivals and competitors. Companies are banking on recycled sources and carbon-negative foam complementing renewable energy and less material usage. 

Key Companies in this theme

    • Adidas AG

    • ASICS Corporation

    • Fila Inc.

    • Under Armor, Inc.

    • Lotto Sport Italia S.p.A

    • New Balance Athletics, Inc.

    • Vans, Inc.

    • Nike, Inc.

    • Puma SE

    • Reebok International Ltd.

Environmental Perspective

Sneaker manufacturers are echoing the role played by the dominance of climate change concerns among shareholders and other stakeholders. Forward-looking companies have committed to a more sustainable future as they continue injecting funds into environmentally preferred materials (EPM) and durable design. Notably, New Balance is contemplating sourcing 50% recycled polyester and 100% preferred leather by 2025. It is worth mentioning that recycled polyester helps minimize dependence on fossil fuels, while preferred leather helps reduce environmental impact across the supply chain. It also aims to attain zero waste to landfill in its footwear factories by 2025. Adopting more sustainable options could gain ground as companies commit to ending plastic waste and promote sports shoes made from recycled materials. 

Social Perspective

Footwear companies are grappling with rising e-commerce penetration, fast-changing consumer preferences and demand for sustainable product offerings. The need for safe labor practices, workforce diversity, customer engagement and safe working conditions has prompted stakeholders to foster their social profile. In 2021, Adidas adopted a new assessment system to boost a range of KPIs, including training participation and resolution of workers’ grievances. The Germany-based company has solidified its position in promoting fair labor practices. In 2020, the shoe manufacturer bolstered its engagement with Tier 2 suppliers to see that company practices are in line with fair labor practices. In 2021, the company added “equity” to its diversity and inclusion commitment, underpinning its DEI to foster an inclusive workplace. 

Is your business one of participants to the Global Athletic Footwear Industry? Contact us for focused consultation around ESG Investing, and help you build sustainable business practices.

Governance Perspective

Transparency, sound corporate governance and risk & opportunity assessment have become invaluable to remaining competitive and enhancing sustainable success. Risk and opportunity management has gained ground to achieve financial goals. For instance, Nike’s Corporate Responsibility, Sustainability & Governance Committee (CRS&G Committee) oversees risks and opportunities, including reviewing investments, policies, activities, and strategies; offering guidance; and monitoring the progress toward and development of its Purpose targets. Prominently, NIKE Global Risk Management has been at the forefront of helping Nike in control and governance processes and build & maintain effective risk management. Amidst receiving flak for lack of DEI advancements, it set a five-year road map in March 2021 to create a diverse and inclusive workforce. The sneaker maker is gearing up to achieve 45% representation of women in leadership positions by 2025. 

Incumbent players are cashing in on the rising footfall of sneakers across emerging and advanced economies. The advancements in low-carbon emission materials, design and technologies have led to energy-saving developments. To illustrate, in September 2022, ASICS rolled out a low-carbon emission sneaker with a carbon footprint of 1.95kg of C02e for every pair produced. These trends indicate the global athletic footwear market could witness a 4.9% CAGR by 2030, with a valuation of USD 127.3 billion in 2021. The immensely competitive nature of the sports apparel industry alludes to bullish investments in ESG initiatives.

About Astra – ESG Solutions By Grand View Research

Astra is the Environmental, Social, and Governance (ESG) arm of Grand View Research Inc. - a global market research publishing & management consulting firm.

Astra offers comprehensive ESG thematic assessment & scores across diverse impact & socially responsible investment topics, including both public and private companies along with intuitive dashboards. Our ESG solutions are powered by robust fundamental & alternative information. Astra specializes in consulting services that equip corporates and the investment community with the in-depth ESG research and actionable insight they need to support their bottom lines and their values. We have supported our clients across diverse ESG consulting projects & advisory services, including climate strategies & assessment, ESG benchmarking, stakeholder engagement programs, active ownership, developing ESG investment strategies, ESG data services, build corporate sustainability reports. Astra team includes a pool of industry experts and ESG enthusiasts who possess extensive end-end ESG research and consulting experience at a global level.

For more ESG Thematic reports, please visit Astra ESG Solutions, powered by Grand View Research

The Importance of Sustainability in the Hair Care Industry

Robust ESG goals have emerged as a promising trend in the hair care industry, prompting leaders, investors and other stakeholders to inject funds into environmentally friendly products. Brands have shifted to manufacturing cruelty-free hair care solutions as ethical claims garner global traction. Environmental changes and global warming have compelled companies to invest in a sustainable business model. Bullish goals can foster environmentally friendly performance and empower diversity. Moreover, water-efficient products have become the trendsetter amidst water supply scarcity. Innovation and commitment toward society and the planet’s needs can redefine the future of beauty. Stakeholders are gearing up to manage, monitor and assess ESG impacts on sustainable development. 

Legion of hair artists is counting on brands that complement human rights and protect people’s and the environment’s safety. Conducting business in an ethical, inclusive and fair manner and focusing on carbon footprint have become a masterstroke to align ESG goals with stakeholders’ interests. Consumers have become gravely concerned about sustainably sourced ingredients and recycled packaging. Prevalence of greenwashing—misleading practice companies and brands adopt to appear sustainable and eco-friendly—that projects a false image of the brand has prompted consumers to be wary of the products they choose. Accordingly, transparency and sound governance have come into the spotlight. 

One of the key companies of the Beauty and Personal Care products market, which specializes in production of organic beauty products through their products is reducing the aforementioned impacts of the preservatives, replacing them with natural and organic components, thereby promoting the UN SDG goals of climate action (SDG13) and good health and wellbeing (SDG3).

Environmental Perspective

With the global push to combat climate change, carbon footprint mapping has become noticeable across the supply chain, including buying raw materials and packaging. Renewed focus on reducing energy used in facilities, emphasis on minimization of carbon emissions in scope 1 and 2 and efforts to foster renewable energy will bode well for industry participants. In September 2021, P&G set an audacious goal to attain net zero GHG emissions across its supply chain and operations, including retailers and raw materials, by 2040.

Incumbent players in the beauty sector have furthered their investments in water strategy. The American multinational company claims to have achieved the 2030 target of 35% water efficiency across its five manufacturing sites. In 2020, P&G injected funds into six projects in California’s Sacramento River and American River basins following the collaboration with the Bonneville Environmental Foundation (BEF) Business for Water Stewardship (BWS) program. These projects could restore over 3 billion liters of water to the environment and people. Brands are expected to emphasize water strategy, waste management, recycling solutions and swift action on climate change to bolster their environmental profile. 

Social Perspective

Stakeholders are navigating opportunities to propel their social performance with a focus on diversity, equity & inclusion, occupational health & safety, human rights, consumer safety and socially responsible products. L’Oréal asserts that 3 million people will gain from its social engagement programs by 2030. The company is bullish on helping 100,000 people from disadvantaged communities to gain access to employment during the same period. The French personal care company claims to have helped over 400,000 girls and women since 2020. 

Well-established players are prioritizing talent recruitment and environment to thrive irrespective of race, sex, religion, color, age, sexual orientation, citizenship, gender diversity and marital status. Voyant rolled out unconscious bias training for all employees in the summer of 2020 and formed a strategic roadmap to underpin inclusivity and augment diversity within the workforce. In 2020, the company hosted an inaugural internship program of 16 interns to promote STEM (science, technology, engineering, and math) talent in local communities. Strengthening employee well-being could be a game changer in the business landscape. 

Is your business one of participants to the Global Hair Care Industry? Contact us for focused consultation around ESG Investing, and help you build sustainable business practices.

Governance Perspective

Commitment to sound corporate governance, business ethics, transparency, corporate behavior and anti-competitive practice has underlined the significance of the ESG framework. Leaders are building credibility with investments in world-class safety and quality standards in line with regulatory requirements. In essence, the audit committee in Unilever comprises a minimum of three non-executive directors. The committee plays an invaluable role in, included but not limited to, risk management and internal control arrangements, legal and regulatory requirement compliance and qualification & independence of external auditors. 

Creating a governance structure, practices, policies and principles that align with the shareholders’ long-term interest and long-term value for stakeholders could be the go-to strategy. In November 2021, Herbal Essence became the first P&G brand to use Eastman Renew, a molecular-recycled PET with 50% certified recycled content. Using state-of-the-art technology can divert plastic waste from the environment and landfills. These trends indicate the global hair market could register a healthy CAGR of around 6.6% between 2021 and 2028.  

About Astra – ESG Solutions By Grand View Research

Astra is the Environmental, Social, and Governance (ESG) arm of Grand View Research Inc. - a global market research publishing & management consulting firm.

Astra offers comprehensive ESG thematic assessment & scores across diverse impact & socially responsible investment topics, including both public and private companies along with intuitive dashboards. Our ESG solutions are powered by robust fundamental & alternative information. Astra specializes in consulting services that equip corporates and the investment community with the in-depth ESG research and actionable insight they need to support their bottom lines and their values. We have supported our clients across diverse ESG consulting projects & advisory services, including climate strategies & assessment, ESG benchmarking, stakeholder engagement programs, active ownership, developing ESG investment strategies, ESG data services, build corporate sustainability reports. Astra team includes a pool of industry experts and ESG enthusiasts who possess extensive end-end ESG research and consulting experience at a global level.

For more ESG Thematic reports, please visit Astra ESG Solutions, powered by Grand View Research

ESG in Healthy Snack Industry - Thematic Report

Responsible Environmental, Social and Governance (ESG) strategies have become instrumental to create growth and value for stakeholders in the healthy snack industry. Equitable and sustainable access to food through diversity, inclusion and well-being could hold prominence across developing and developed countries. Accelerating sustainability efforts have become paramount amidst the COVID-19 pandemic and Russia’s invasion of Ukraine. Prominently, climate change has led to crop failures, extreme weather, supply chain bottlenecks and food shortages. The prevailing situation warrants a renewed focus on sustainability—an approach that is in line with an environmentally friendly food system.

Lately, regenerative agriculture has come to the fore with the need to reduce carbon footprint gaining ground. Brands have shown traction to minimize tillage and foster a regenerative supply chain. Food and beverage manufacturers are poised to play a pivotal role in tackling greenhouse gas emissions. Sourcing ingredients through regenerative agriculture could be the new normal and gain ground across retailers. Climate-friendly snack companies are likely to show traction for regenerative farming to create a resilient ecosystem and boost food security. Leading players are working closely with farmers to make soil healthier, foster biodiversity, enhance watershed health and bolster farming communities. For instance, PepsiCo aims at spreading regenerative agriculture practices to 7 million acres by 2030.  

Uptake in ESG investments provides a promising opportunity to align financial gains with upsides for the environment and society. With the prevalence of suboptimal nutrition denting the brand value and fiscal performance of the food sector, snacks with a strong ESG profile could be the game changer. Industry players have reinforced traction to enhance products and recapture packaging materials, minimize GHG emissions, replenish water and expedite changes required to address climate change. 

Mondelēz Underscores Environmental Portfolio

Investments in resilient and sustainable food supply chains could protect the environment and propel a transition to regenerative practices. Amidst possible repercussions of climate change, robust initiatives to minimize environmental impact have become pronounced. In June 2022, Mondelēz International exhibited bullish initiatives, including a reduction in water usage, packaging and greenhouse gas emissions in its 2021 Snacking Made Right Report.

Sustainable snacking companies are slated to emphasize ambitious ESG goals—Mondelēz is on course to use 5% recycled plastic content by 2025, including Philadelphia tubs and Cadbury Dairy Milk sharing bars. The company intends to have 100% renewable electricity in 6 of its U.K. production sites and a reduction of 21% in Scope 1 and 2 CO2e emissions (baseline 2018). The snacking company has set a net zero GHG emissions by 2050 and is injecting funds into Circulate Capital Ocean Fund to underpin the collection of plastic waste. In September, it also issued its first green bond, depicting Mondelēz’s commitment to propel the ESG agenda. 

Environmentally friendly snacking has amassed popularity with major players gearing to provide the right product, made the right way for the right moment. For instance, Mondelēz noted that the majority of dairy materials were purchased from suppliers functioning under animal welfare schemes. The U.S. multinational company aims for a 15% reduction in food waste in internal manufacturing sites and a 10% reduction in absolute water usage in priority sites by 2025. Moreover, the company also noted that 100% wheat volume is required for Europe business unit biscuits production under the Harmony charter by 2022. 

Kellogg Prioritizes Social Commitment

Healthy snack brands are bolstering communities and investing in sustainable access to food with improved quality of life for families and people with nutritious and accessible options. Social equity and opportunities with diversity and inclusion have provided a fillip to the industry profile. Brands are measuring their impact on farm families and employees. Some of the dynamics, such as safe and healthy working conditions, gender participation and financial literacy could be pronounced.  For instance, in August 2022, Kellogg announced its ambitious goal of creating better days for 3 billion people by 2030. The company noted in its annual ESG report (illustrating achievements from 2015 through 2021) that around 800 million people were nourished with its foods, while it fed 219 million people grappling with hunger or crisis. Additionally, the globally popular brand also backed 445,000 farmers, several of whom were women and smallholders. 

The U.S. company has upped its focus on gender diversity and boosted equity and inclusion in the workforce. Kellogg suggested that around 44% of the global roles were filled by women at the management level. The American company expressed contemplation for gender 50/50 parity at the management level by 2025. The company has also recognized the significance of women in the agriculture sector and is identifying areas of the supply chain with the highest presence of women. Moreover, in 2020, Kellogg published its Global Human Rights Policy, reinforcing salient human rights risks and human rights strategy. 

Is your business one of participants to the Global Mattress Industry? Contact us for focused consultation around ESG Investing, and help you build sustainable business practices.

Nestle Adds Value to ESG with Investments in Governance

At a time when the regenerative food system has gained a massive uptick, governance has received notable traction among investors, regulators and other stakeholders. Implementation of ESG-related performance indicators has gained ground. In 2021, Nestlé rolled out a new structure for managing ESG topics and its Board of Directors created a dedicated and distinct Sustainability Committee to review the company’s sustainability agenda and boost shared value. The ESG and Sustainability Council offers strategic leadership, governance and execution guidance and advises Nestlé’s Executive Board on making science-based and informed decisions. 

Nestlé mentioned in its Creating Shared Value and Sustainability Report 2021 that it appointed 11 new independent directors since 2015. Moreover, the food & beverage company also ran a series of Food Systems Summit Dialogues offering inputs on innovation for food systems transformations, mainstreaming regenerative agriculture and how to make nutritious diets more accessible, affordable and adequate. It is also expected to vouch for policies that assist in whole grains consumption and is committing to minimize sodium in frequently consumed products by 2025 and 2030. Besides, it conducts a materiality assessment every two years to help identify the economic, social and environmental aspects.

Business leaders and ESG subject matter experts are vying to drive positive change through partnerships, product launches, innovations and technology advancements that address sustainability. To illustrate, in May 2021, Hershey announced the acquisition of Lily's Confectionery Brand to bolster its zero-sugar product offerings. It could help the former underscore the use of innovative sugars in snacks. With innovations and industry-wide developments emphasizing ESG, the healthy snack market could witness a CAGR of 6.6% during the assessment period. A renewed focus on the environment, health, safety and climate policy could steer the growth trajectory. 

About Astra – ESG Solutions By Grand View Research

Astra is the Environmental, Social, and Governance (ESG) arm of Grand View Research Inc. - a global market research publishing & management consulting firm.

Astra offers comprehensive ESG thematic assessment & scores across diverse impact & socially responsible investment topics, including both public and private companies along with intuitive dashboards. Our ESG solutions are powered by robust fundamental & alternative information. Astra specializes in consulting services that equip corporates and the investment community with the in-depth ESG research and actionable insight they need to support their bottom lines and their values. We have supported our clients across diverse ESG consulting projects & advisory services, including climate strategies & assessment, ESG benchmarking, stakeholder engagement programs, active ownership, developing ESG investment strategies, ESG data services, build corporate sustainability reports. Astra team includes a pool of industry experts and ESG enthusiasts who possess extensive end-end ESG research and consulting experience at a global level.

For more ESG Thematic reports, please visit Astra ESG Solutions, powered by Grand View Research

Why ESG Matters in the Synthetic Leather Industry?

Environmentally friendly textiles have received an uptick globally with designers, entrepreneurs, venture capitalists and other stakeholders gearing up to boost their synthetic leather industry profiles. As consumers become more conscious about sustainability, manufacturers are likely to take a giant stride in making ethical choices. Synthetic leather tends to have less impact pertaining to GHG, depletion of fossil fuels, water used for production and animal abuse. Moreover, the application of solvent-free polyurethane and polyolefin heat shrinkable elastomer resins has played a pivotal role in minimizing volatile organic compounds.

The synthetic material has gained ground to be refurbished, repaired, repurposed and recycled. Lately, artificial leather has come on the horizon to play a pivotal role in reducing plastic, using organic waste and reducing environmental impact. Besides, the use of vegan leather has amassed popularity, partly due to the soaring awareness on sustainability. Prominently, environmental concerns pertaining to leather production have encouraged stakeholders to partake in ESG strategies. Stakeholders, including manufacturers, brands, suppliers and investors are expected to bank on sustainable solutions, including the use of high-grade artificial leathers stemming from non-toxic dyes and recycled polyester. 

Environmental Perspective

The need to create sustainable leather has added a fillip to the prospect of synthetic materials. Stakeholders have prioritized the significance of zero discharge of hazardous chemicals amidst a global push to contain pollution. Companies of all sizes and sectors have realized the need to foster their sustainability portfolio and live up to ESG responsibilities. To illustrate, Smit & Zoon aims to create an environmentally and socially sustainable leather supply chain by 2025. The company is gearing to develop innovative leather-making processes and chemistry to boost circularity by 2025. It has also used Gold Standard Verified Emission Reductions certification program to further its environmental profile. The Netherlands-based company has updated its Product Passport and adopted wastewater guidelines, Life Cycle Assessments, compostability, biodegradability and circularity. 

Forward-looking companies have shown an increased inclination for bio-based polyurethane that provides a notable bio-based carbon content and minimizes CO2 emissions. Besides, vegan leather has become a beacon of growth and innovation. In essence, a soaring number of vegan materials could be a vital cog in saving products and reducing waste from landfill. The expanding applications of vegan leather products from repurposed and reused materials are expected to help reduce landfill waste.  Moreover, artificial leathers in cars have witnessed profound growth as companies strive to adopt natural ingredients. Synthetic materials could be an invaluable addition to upgrading vehicles with automakers emphasizing the use of sustainable materials. Prominently, Tesla uses vegan leather as its supplier Ultrafabrics asserts it can replace animal leather. At a time when the auto sector has become one of the largest consumers of artificial material, synthetic leather could be a game changer in cabin upholstery and car seats. 

Is your business one of participants to the Global Synthetic Leather Industry? Contact us for focused consultation around ESG Investing, and help you build sustainable business practices.

Social Perspective

The year 2023 and beyond could observe an unprecedented rise to strengthen healthy and safe workplaces and minimize employee turnover. Organizations are gearing up to boost people’s well-being and mental health through the adoption of bullish policies, training and certification to ensure the safety of employees. For instance, Stahl introduced the Road to Zero (R20) program to emphasize the integration of safety into the company’s culture and zero-tolerance policy on unsafe behavior. The company is also committed to do away with the restricted substances in the value chain. It has made a significant stride in chemical safety in Bangladesh. Solidaridad alluded to a collaboration with Stahl in Bangladesh in its 2021 Annual Report. The partnership saw them initiate sustainable practices in the industry in India and Bangladesh. The Dutch NGO kicked off a new project and claims to have covered around 80% of the leather clusters in India. 

Stakeholders have also vouched for the training and development of leather technicians and designers and the hiring of young and talented workforce. The onslaught of the COVID-19 pandemic compelled in-person training to take a backseat. During 2021, Stahl provided access to online training through an e-learning catalog and upped investments in cybersecurity, compliance and growth of soft skills. In 2021, it finalized the Automotive Leather Finishing Post Graduate Certificate course for some of the students and postponed it to 2022 for those who could not attend owing to travel restrictions. During the year, the company claims over 2,000 people from around 150 organizations attended Stahl Campus training courses. 

Governance Perspective

The tailwinds for a sound corporate governance system have encouraged investors and other stakeholders to count on fair management and improved corporate value. For instance, Kuraray has formed corporate governance functions under the aegis of its BoD and Board of Corporate Auditors to boost the monitoring functions and effectiveness of supervisory. The board of corporate auditors comprises 5 auditors, with at least three of them being independent outside corporate auditors and one female corporate auditor. The company has also formed the Corporate Advisory Committee consisting of outside experts and officers to bolster its governance portfolio. 

Leading players are reinforcing the need to focus on labor and human rights, sustainable procurement and ethics. Smit & Zoon addressed the UNG SDG goals 6,8,12,13,17 and materiality matrix facets, such as water & effluents, occupational health & safety, anti-corruption, environmental compliance, water & effluents, customer health & safety and energy. Additionally, Responsive Industries took a giant leap to foster workplace safety for women. The company noted in its Annual Report 2022 that it laid down Internal Complaints Committee for redressal of sexual harassment of female employees at workplace. It has also introduced a system that will help employees and directors to report issues regarding suspected or actual fraud, unethical behavior and violations of the company’s code of conduct and ethics. 

With synthetic leather-related products garnering notable demand, there are challenges and opportunities for stakeholders to embrace ESG goals. To illustrate, Stahl inferred that around 90.23% of its employees had a permanent contract in 2021. Meanwhile, in July 2022, Sage-ONF rolled out silicone synthetic leather in China. It will help to keep up with the demand for mobility interior, thereby boosting sustainability commitments through the petroleum-free and non-carbon-based solution. These trends complement the valuation of the global synthetic leather market at USD 36.24 billion in 2022. Well-established players will strive to underpin their core competencies and offer products that will propel ESG performance.  

 About Astra – ESG Solutions By Grand View Research

Astra is the Environmental, Social, and Governance (ESG) arm of Grand View Research Inc. - a global market research publishing & management consulting firm.

Astra offers comprehensive ESG thematic assessment & scores across diverse impact & socially responsible investment topics, including both public and private companies along with intuitive dashboards. Our ESG solutions are powered by robust fundamental & alternative information. Astra specializes in consulting services that equip corporates and the investment community with the in-depth ESG research and actionable insight they need to support their bottom lines and their values. We have supported our clients across diverse ESG consulting projects & advisory services, including climate strategies & assessment, ESG benchmarking, stakeholder engagement programs, active ownership, developing ESG investment strategies, ESG data services, build corporate sustainability reports. Astra team includes a pool of industry experts and ESG enthusiasts who possess extensive end-end ESG research and consulting experience at a global level.

For more ESG Thematic reports, please visit Astra ESG Solutions, powered by Grand View Research

ESG in Real-time Payments Industry - Thematic Report

A quantum leap in real-time payments (RTPs) has leveraged customers, enterprises and governments to streamline payments and enhance the efficiency of the financial ecosystem. Real-time payments have made financial services attractive among millennials and the Gen Z population. The upsides of RTPs will be pronounced as policymakers, start-ups and other stakeholders emphasize the expansion of modern payments infrastructure. When compared with legacy alternatives that normally take days to reach the target, RTP has brought a tectonic shift to provide faster and more robust means of payment. It has unfolded social and economic facets that can influence stakeholders across verticals.

Industry leaders have jumped on the bandwagon to inject funds into environmental, social and governance (ESG) frameworks and policies. The year 2023 and beyond could witness real-time payments continuing disruptions. Notably, it could offset economic inefficiency with money locked up in financial systems. Cash-dominated regions are expected to invest in the advanced payment structure to help consumers gain access to financial services and help governments collect taxes and distribute benefits accurately and swiftly.

Fintechs and banks turned adversities into opportunities following the prevalence of the COVID-19 pandemic. The outbreak brought a paradigm shift in the payment landscape, bolstering the digital payment ecosystem. Companies scampered to keep up with the payment demands amidst a surge in cyber threats. Early adopters anticipate witnessing better liquidity management, enhanced communication with counterparties and seamless access to transaction data. 

Environmental Perspective

Sustainable payment structure has emerged as a pressing segment amidst the soaring cost of cash management, including environmental, social and governance cost of printing notes. Payments initiated and settled instantaneously could prove to be a game-changer in the cost-effectiveness of cash management and be available 24 hours a day, 7 days a week & 365 days a year. Organizations have exhibited strong demand to boost spending on payment infrastructure. According to an FIS survey released in 2021, around 27% of organizations expect to implement RTP in the next three to five years, while 14% have already embedded the payment infrastructure. 

At a time when customers of U.S. corporations are writing approximately 2.3 billion checks (equivalent to 455,000 trees) annually to pay their bills, digital payment could be a silver lining. With policymakers and global regulators pushing for a framework for reporting of climate risks, a transition from paper to digital could be a notable step toward sustainability. In April 2022, one of the largest check processors in the U.S. BNY Mellon announced a reduction in paper checks. Clients have reportedly minimized the number of checks they send to BNY Mellon for processing by 8.5% since 2019.

In May 2021, the check processing company announced the rollout of a real-time electronic bill (e-bill) and payment solution, it claims to be the first bank cashing in the RTP network to offer instant digital consumer bill pay service. Reflecting these trends, advanced economies, such as the U.S. have set an overarching goal of minimizing greenhouse gas emissions by 50%-52% by 2030. Advancements in payment systems are expected to complement these priorities. 

Social Perspective

With payments becoming cashless, the road to a digital economy has become pronounced globally. Agility and being proactive on ESG have become compelling as a solid ESG proposition can be the precursor to the company’s long-term success. A buoyant ESG framework can propel employee motivation, reduce employee turnover and enhance social credibility. For instance, Mastercard alluded to the launch of four “work from elsewhere” weeks annually in its 2021 Corporate Sustainability and Diversity, Equity, and Inclusion (DEI) report.

The payment processing company joined forces with Neurodiversity in the Workplace (NITW) to roll out a Neurodiversity Hiring Pilot for the recruitment of neurodivergent candidates for full-time job opportunities. A sharpened focus on social performance has created an avenue of growth. The U.S.-based company has also set an “In Solidarity” action plan to overcome racism and is on course to bring 50 million micro and small businesses and 1 billion people into the digital ecosystem by 2025. 

Businesses have also realized the need for skills renewal to leverage lucrative investment opportunities. The FIS survey asserts that around 44 percent of organizations will emphasize skills to bolster innovation. Fintech companies are investing in diversity and economic strength, especially among underbanked populations. To illustrate, in 2021, PayPal earmarked USD 535 million for racial equity and social justice and allocated USD 108 million commitment to underpin the economic empowerment of women and girls. The online payment company also furthered its social profile by enabling early wage access, financial education sessions and financial wellness grants. Companies are expected to harness the power of the ESG ecosystem to tap into the global landscape. 

Is your business one of participants to the Global Real-time Payments Industry? Contact us for focused consultation around ESG Investing, and help you build sustainable business practices.

Governance Perspective

Governance has become invaluable for banks to act as gatekeepers, comply with the law, make effective decisions and meet the needs of external stakeholders. Companies are gearing up to adhere to environmental laws amidst soaring sustainability concerns. High standards set by governance structure will add a fillip to the brands’ reputation and corporate culture. Sound internal governance and disclosures pertaining to the role of the Board and management in climate-related risk management and technology resiliency could reshape the industry dynamics.

Prevalence of practices, such as a diversified board of directors, ethical business practices and transparency has propelled the prominence of the ESG framework. For instance, BNY Mellon boasts of 91% board independence and 36.4% women directors (after the election of directors in 2022). Throughout the year, the senior management rendered reports and updates of the company’s environmental and sustainability programs to the Corporate Governance, Nominating and Social Responsibility (CGNSR) Committee. 

Directors, venture capitalists and other stakeholders have prioritized governance, long-term business strategy and education on climate-related issues. Well-established brands have underscored monitoring board composition, risk management and diverse board structure. Akin to BNY Mellon, independent directors at Visa were pegged at 91% (as of April 2022). Besides, the payment giant has fostered its ethics & compliance program amidst a shift to a virtual business environment. Notably, Ethisphere Institute listed Visa among the world’s most ethical companies in early 2022. Embedment of ethics, compliance and transparency into management processes could further promote and bolster corporate governance. 

Forward-looking companies face an uphill task that provides both challenges and opportunities to empower people, invest in a diversity workforce and protect customers from cyber threats. The projected CAGR of the real-time payments market at 34.9% through 2030 indicates a rising trend of electronic payment infrastructure.  

About Astra – ESG Solutions By Grand View Research

Astra is the Environmental, Social, and Governance (ESG) arm of Grand View Research Inc. - a global market research publishing & management consulting firm.

Astra offers comprehensive ESG thematic assessment & scores across diverse impact & socially responsible investment topics, including both public and private companies along with intuitive dashboards. Our ESG solutions are powered by robust fundamental & alternative information. Astra specializes in consulting services that equip corporates and the investment community with the in-depth ESG research and actionable insight they need to support their bottom lines and their values. We have supported our clients across diverse ESG consulting projects & advisory services, including climate strategies & assessment, ESG benchmarking, stakeholder engagement programs, active ownership, developing ESG investment strategies, ESG data services, build corporate sustainability reports. Astra team includes a pool of industry experts and ESG enthusiasts who possess extensive end-end ESG research and consulting experience at a global level.

For more ESG Thematic reports, please visit Astra ESG Solutions, powered by Grand View Research

ESG Shows Ways from Pollution to Solution to Recycled Plastic Companies

The growing spotlight on the environmental, social and governance (ESG) framework has prompted the recycled plastic industry players to foster their sustainability portfolio. Stakeholders are positioning themselves to connect brands with environmentally friendly plastic. In essence, recycling companies are gearing up to minimize waste and seek innovative ways to combat carbon emissions. Amidst the global push to eradicate pollution, packaging has garnered huge headlines. UNEP notes that global plastic production is pegged at 400 million tons per year. Besides, merely 9% of this is recycled and 12% is incinerated. Accordingly, in March 2022, the U.N. member states endorsed a resolution to beat plastic pollution and create an international legally binding agreement by 2024. Sustainable and affordable options for recycled products have gained ground, furthering the need for ESG frameworks globally.

Public policy could be instrumental in overcoming plastic packaging pollution. The ubiquitous nature of plastic has put pressure on regulators and investors to find solutions for pollution across sectors, including retail, manufacturing, industrial, and electronics. According to Greenpeace, supermarkets in the U.K. emit 800,000 tons of plastic packaging per year, while the government is committed to ensuring all plastic packaging is reusable, recyclable or compostable by 2025. Meanwhile, in May 2022, legislators in New York proposed two bills to enhance plastic recycling rates. It would need producers to eliminate toxic chemicals from packaging, minimize packaging and pay for recycling and disposal costs.

Veolia Bolsters Environmental Profile to Navigate Growth Potentials

Concerted efforts from manufacturers and suppliers to combat pollution have led to the demand for recycled products and services. The shifting trend toward recycled products is expected to foster the environmental profile. Companies upgrading technologies to reduce environmental impacts could be the new normal. Veolia asserted in its Integrated Report 2021-2022 that around 476 thousand metric tons of plastic were recycled in its transformation plants in 2021. The company has acquired a host of end technologies to recycle plastic and equipment for biological, material and energy processing. It expects around 610,000 metric tons of recycled plastic to leave its processing plants by 2023.

With China and countries from Europe and North American Free Trade Agreement (NAFTA) witnessing a surge in plastic production, stakeholders are poised to boost their efforts to eliminate waste from the environment. Leading players are likely to use polyethylene (HDPE or LDPE)—in packaging or construction—and polypropylene (PP)—in household appliances, furniture, automotive and construction. In October 2022, Veolia rolled out PlastiLoop which will help customers source recycled plastics with a host of polymers. The France-based company has been offering high-performance ready-to-use recycled resins, including HDPE, PP, PET, LDPE and PS.

Is your business one of participants to the Global Recycled Plastic Industry? Contact us for focused consultation around ESG Investing, and help you build sustainable business practices.

PureCycle Emphasizes Social Performance

Well-established players are positioning themselves to connect brands with sustainable and high-quality products and complement social responsibilities. Recycling technology companies are prioritizing workplace safety, diversity and training & development, recruiting & hiring, discipline, compensation & benefits. To illustrate, PureCycle has a Diversity & Inclusion Policy in place to foster non-discrimination, equal employment opportunity and diversity and inclusion, among others. The company alluded to a low turnover as low as 7.5% in 2021. It has also put forth risk management systems and formed policies to help reduce possible accidents, such as team member and visitor safety protocols, a code of business conduct and ethics, guidelines for management systems and operational excellence policy. Moreover, the company is slated to establish a recruiting and employee engagement program to reinforce a resilient workforce.      

Investors, manufacturers and other stakeholders have underscored the importance of workers’ safety. Prominently Shell inferred that over 100,000 employees and contractors completed compulsory training on the Life-Saving Rules that came into effect from January 2022. It is also committed to its Shell Supplier Principles and expects contractors and suppliers to offer a dedicated whistle-blowing mechanism where grievances pertaining to labor and human rights, Health, Safety, Security, Environment (HSSE) & Social Performance (SP) and business integrity are recorded anonymously.

Get more insights about how key industry participants like REMONDIS SE & Co. KG, Biffa, Waste Management, Inc., Stericycle, Republic Services, Inc., WM Intellectual Property Holdings, LLC, and Veolia are identifying, analyzing, and mitigating ESG risks and ensuring compliance

Dow Invests in Corporate Governance Structure

Stakeholders have depicted profound inclination to enhance governance, accountability and transparency. In doing so, industry players are likely to maintain a board with diverse backgrounds, design compensation programs and ensure a culture of integrity. According to Dow’s 2021 ESG report, 5 new members of its board have been women or U.S. ethnic minorities in the last 3 years. It has also set comprehensive ESG disclosures in line with GHG Protocol, GRI, TCFD, WEF and SASB. In its 2021 report, the company alluded to meeting the 2017 commitment to fully implement the TCFD recommendation. 

All board committees—audit committee; compensation and leadership development committee; corporate governance committee and Environment, Health, Safety & Technology (EHS&T) Committee— comprise independent directors. The board and its committees underscored ESG transparency and accountability with the first integrated ESG report in 2021. Furthermore, the company noted in its second annual ESG report released in June 2022 that it took a giant stride with enhanced carbon emissions reporting and climate risk disclosures and greenhouse gas intensity metrics.

Corporate governance, with the focus on recycling technologies, has become the mainstay for board members and stakeholders to remain ahead of the curve. In the last two years, Dow has reportedly infused around USD 50 million into recycling infrastructure, impact funds and major technologies to transform waste into solutions. Moreover, in June 2022, it revealed a slew of partnerships in plastics recycling, including the collaboration with Mura Technology. It will help eliminate plastic pollution with the construction of advanced recycling facilities. Mura’s first plant using the technology could begin in 2023 in England. 

At a time when environmental, social and governance frameworks could propel customer-centric, innovative and sustainable, stakeholders could inject funds into organic and inorganic strategies. For instance, in January 2022, SCG Chemicals announced a collaboration with Shell to introduce eco-friendly lubricant bottles. The packaging reportedly recycles household plastic waste complying with ESG and the UN Sustainable Development Goals. Grand View Research anticipates the global recycled plastic market to depict around 4.8% CAGR by 2030. Industry leaders are expected to underpin their efforts to minimize GHG emissions, prevent plastic waste and provide recycled plastic products.  

About Astra – ESG Solutions By Grand View Research

Astra is the Environmental, Social, and Governance (ESG) arm of Grand View Research Inc. - a global market research publishing & management consulting firm.

Astra offers comprehensive ESG thematic assessment & scores across diverse impact & socially responsible investment topics, including both public and private companies along with intuitive dashboards. Our ESG solutions are powered by robust fundamental & alternative information. Astra specializes in consulting services that equip corporates and the investment community with the in-depth ESG research and actionable insight they need to support their bottom lines and their values. We have supported our clients across diverse ESG consulting projects & advisory services, including climate strategies & assessment, ESG benchmarking, stakeholder engagement programs, active ownership, developing ESG investment strategies, ESG data services, build corporate sustainability reports. Astra team includes a pool of industry experts and ESG enthusiasts who possess extensive end-end ESG research and consulting experience at a global level.

For more ESG Thematic reports, please visit Astra ESG Solutions, powered by Grand View Research

ESG to Add Value to the Point-Of-Sale (POS) Terminal Industry

The environmental, social and governance (ESG) landscape has gone mainstream in the point-of-sale (POS) terminal industry. Robust digital payment technologies have potentially removed or reduced paperwork and bureaucracy and minimized the need for cash. Predominantly, automated payment processes are fostering corporate work, while retailers have exhibited an increased inclination for POS terminals as sustainability factors garner traction among shareholders, investors, customers and other stakeholders. Payment companies have furthered their traction for ESG pillars to propel social credibility, enhance brand position and place social goals on top of the agenda.

The onslaught of the COVID-19 pandemic disrupted the normal circulation of coins and spurred the penetration of debit/credit card payments. The raw materials (chemicals made from petroleum) process emit GHG emissions, while the magnetic strips and smart card chips could augment the environmental costs. An uptick in cashless payments, along with the growth of mobile payments, has furthered the use of POS equipment. Besides, the generation of e-waste has expedited the need for robust governance and environmentally friendly strategies to provide a lasting impact on security, comfort and the environment.

Environmental Perspective

An unprecedented rise in waste from scrapped cards has prompted stakeholders to seek environmental principles to underscore a sustainability portfolio. Furthermore, carbon emissions from energy used to manufacture the cards have augmented the GHG. Industry leaders have vouched for digital wallets that may offset the environmental impact of debit and credit cards. According to a France-based merchant services technology company Ingenico, there are around 110 million terminals installed globally. The growth trajectory alludes to an increased focus on the environmental performance. The company has introduced eco-design of payment terminals to develop, design and provide products that are environmentally friendly. The service company has augmented R&D efforts to optimize terminals' energy efficiency, minimize logistics' carbon footprint, integrate sustainable procurement into the supply, eliminate toxic substances and reduce the raw material used.

Industry participants have sought carbon balancing to engage in proper e-waste management, foster an emission reduction strategy and offset the residual carbon footprint. For instance, in March 2022, Toshiba collected around 907 Kg of e-waste for recycling. It revised Response to Climate Change in Environmental Future Vision 2050 to attain carbon neutrality throughout the value chain. The company inferred in its Sustainability Report 2021 that it would inject funds into energy-saving equipment, bolster procurement of energy from renewable sources, bring renewable energy equipment to the fore and emphasize products and services that reduce GHG emissions.

Key Companies in this theme

• Cisco Systems, Inc.

• Panasonic Corporation 

• Samsung Electronics Co., Ltd. 

• Hewlett-Packard Inc. 

• Toshiba Corporation

Retailers, investors, manufacturers and other stakeholders have prioritized sustainability portfolio to unlock new opportunities to reach out to customers. According to the EU Eco-design directive, 90% of manufacturing costs and 80% of environmental pollution are due to the decisions taken at the production design. The use of recyclable and recycled raw materials could prove to be instrumental to add impetus to the environmental profile. For instance, Panasonic Corporation has minimized the waste generation by fostering the recycling rate of waste materials. Besides, HP exhibited the lowest emission and energy consumption rate in 2020 and aims for zero waste in operation by 2025.

Social Perspective

A robust ESG proposition could provide a win-win scenario as distributors, retailers and other stakeholders engage investors on their social performance. Social factors, including gender diversity, social trends, labor relations and inclusion, are expected to usher in innovations and growth through greater credibility. Bullish initiatives, including defining gender and racial representation and social-responsibility audits, will hold prominence, driving the business and benefiting shareholders and stakeholders. On the social pillar, Toshiba Corporation ranked supreme with approximately 90% score. In its Sustainability Report 2021, the Japanese conglomerate contemplated boosting the number of human rights awareness participants by 10% in the country from the preceding FY level. The multinational company has established a whistleblower system for employees—Toshiba Hotline—it received 129 cases in FY2020. Furthermore, in December 2020, the company rolled out the Chameleons Club with channels, such as LGBT+ Allies, to underscore and reinforce inclusion and deepen bonds among employees.

Is your business one of participants to the global POS Terminals industry? Contact us for focused consultation around ESG Investing, and help you build sustainable business practices.

Amidst companies gearing to encourage employees to feel fulfillment and pride in their work and harness technology, high turnover rates have sparked concerns among stakeholders. According to the Samsung Electronics Sustainability Report 2022, the overseas turnover rate was pegged at 15.7% in 2021, while it stood at 2.4% in Korea. However, it has robust labor and human rights framework with strong anti-discrimination and anti-harassment policies. The company provided specialized online training for 91% of staff members in jobs with increased human rights risks. Besides, it has around 32 labor unions and 40 Work Councils to enhance communication with employee representative bodies. In a bid to reflect the thoughts of youth in business activities, Samsung formed the Gen Z and Millennial Board to enable the younger generation to share their views on customer trends, products and trending topics on social sites.

Governance Perspective

Stakeholders are gearing to provide impetus to sustainability governance through transparent functioning, improved management efficiency, independence and expertise of the board, business ethics, and optimal internal controls. In the thematic report, Grand View Research's ESG scoring model notes that HP was at the helm with respect to corporate governance. The HPE board comprised 12 directors with vast knowledge, skills and expertise, with eleven working as independent directors (as of FY 2021). Moreover, around 50% of board members were identified with one of the more diverse groups. HPE's board committee of ESG includes an audit committee; human resources and compensation committee; a finance and investment committee; and nominating, governance, and social responsibility committee. Predominantly, the company has established an enterprise risk management (ERM) program overseen by the CFO and underpinned by HPE Executive Risk Council.

Ethical decision-making has gained ground to add fillip to business practices and encourage customers, employees, suppliers and stakeholders to voice concerns pertaining to business conduct. HPE asserts that ethics allegations and inquiries witnessed a 31% reduction in 2021 from 2019. Meanwhile, Cisco alludes to 1190 inquiries—53% of those related to conflict of interest disclosure, 28% questions and 19% allegations of misconduct—made to the Ethics office in 2021. The executive Leadership Team of Cisco recorded videos elucidating the significance of ethics and compliance to the company and shared real-life examples of violations observed within the organization during the same year.

Disclosure of corporate information can steward companies' approach to ESG performance through transparency. In April 2022, Panasonic Group adopted an operating company system to boost Group management, secure management and improve corporate value. It has formed the Audit & Supervisory Board to foster the effectiveness of audit activities, assess and decide countermeasures and propel cooperation with the Internal Audit Department. Additionally, Panasonic has formed disclosure control procedures to adhere to laws and ordinances in Japan and overseas, to implement the accurate, fair and timely disclosure of information and comply with the rules of financial instruments exchanges. As stakeholders strive to bridge the gaps of the growing ecosystem and use advanced technology, the uptake in the point of sale applications could underpin the sustainability portfolio, leveraging them to count on the foundation of robust corporate governance and accountability.

Incumbent companies are responding to the unwavering popularity and significance of ESG goals to stay ahead of the curve. ESG programs on the global scale have become prevalent and frontrunner to bolster brand position in the long run. In August 2022, Toshiba Tec expressed contemplation in developing point of a sale software platform for U.S. retailers. The subsidiary of Toshiba is gearing to augment the number of employees by more than two-fold in the new Dallas hub by 2025. It is expected to have more than 30 software engineers in the U.S. hub by March-end 2023. The prevailing trends suggest exponential growth in digital payments could serve as a catalyst for the business strategies surrounding POS equipment. The global POS terminals market size stood at USD 85.16 billion in 2021 and could witness around 8.5% CAGR from 2022 through 2030. A notable shift towards a strong ESG proposition has become pronounced among financial stakeholders, investors, and companies that could exhibit potential growth opportunities emanating from ESG activities.

About Astra – ESG Solutions By Grand View Research

Astra is the Environmental, Social, and Governance (ESG) arm of Grand View Research Inc. - a global market research publishing & management consulting firm.

Astra offers comprehensive ESG thematic assessment & scores across diverse impact & socially responsible investment topics, including both public and private companies along with intuitive dashboards. Our ESG solutions are powered by robust fundamental & alternative information. Astra specializes in consulting services that equip corporates and the investment community with the in-depth ESG research and actionable insight they need to support their bottom lines and their values. We have supported our clients across diverse ESG consulting projects & advisory services, including climate strategies & assessment, ESG benchmarking, stakeholder engagement programs, active ownership, developing ESG investment strategies, ESG data services, build corporate sustainability reports. Astra team includes a pool of industry experts and ESG enthusiasts who possess extensive end-end ESG research and consulting experience at a global level.

For more ESG Thematic reports, please visit Astra ESG Solutions, powered by Grand View Research