Should you be ESG certified?

"I think we should join the new Green Certification program I presented to the management last week," your COO says at the end of the meeting.

You reflect for a few seconds before clearing your throat. "I don't see the point in it. We're already doing what we can for the environment, and this seems excessive. It was only two years ago that we did our green certification with another vendor, and this seems redundant."

"I hate to bring this up, but their head of sales called me yesterday and asked about our progress. At the end of the conversation, she mentioned that they would publish the names of all the companies in our industry that have not joined, like a hall of shame."

You feel your fist tighten. "To me, this sounds like blackmail!" you say firmly. "Come on, don't get worked up about it. It's only $5K, and then we can put another logo on our webpage and in our sales material, showing how seriously we are working on ESG."

Expert 1: Get the certificate

In today’s business landscape, Environmental, Social, and Governance (ESG) considerations are becoming increasingly important. A 2022 study by McKinsey shows that companies with strong ESG initiatives have a 25% higher chance of financial outperformance compared to peers. Adding another certification shows commitment to ESG, which is attractive to both customers and investors. The possibility of being included in a “hall of shame” for not participating in the certification could significantly damage the company's reputation. Negative publicity can impact stakeholder trust, future contracts, and customer perceptions. The cost of bad press could far outweigh the $5,000 certification fee. The certification provides a tangible benefit—enhanced brand credibility. Adding the certification logo to the company’s webpage and sales materials can serve as an effective marketing tool. A recent survey shows that 62% of consumers are willing to pay more for sustainable products, so this certification could directly boost sales. Given these benefits, the certification aligns with both immediate goals and long-term strategy.

Expert 2: Forget about the certificate

The company already obtained a green certification just two years ago. Joining another similar program could be viewed as excessive and unnecessary. It is better to focus on maximizing the benefits of the existing certification rather than continuously adding redundant certifications that offer little additional value. Research shows that over-certification can dilute the perceived credibility of a company’s environmental efforts rather than enhance it. The threat of being publicly shamed if the company does not join the certification could be seen as a coercive marketing tactic. Succumbing to this pressure sets a precedent for being influenced by external forces rather than making strategic decisions based on the company’s true needs. The company should remain autonomous in its sustainability initiatives. The company is already committed to environmental efforts. Rather than chasing more certifications, it should focus on improving its actual sustainability performance and communicating those achievements to stakeholders. Based on these points, joining the new certification program may not provide enough value to justify the cost and redundancy.

My opinion: I would not do the certification because I don´t like greenwashing, and I don´t like people who try to blackmail my company.