Dispatch from the Sunshine State: ESG at CAGNY

By Jake Yanulis

While the political pushback against ESG-focused investing has been widely covered, you would not know it from attending the Consumer Analyst Group of New York (CAGNY) Conference held in February  in Boca Raton, FL.

Vocal critics have asserted that corporate executives and investment managers have prioritized internal policies – around climate and hiring diversity, for example – that undercut the goal of creating shareholder value, considered by many the ultimate role of a public company.

In the Sunshine State, whose governor Ron DeSantis has taken a vocal stance against what he calls “woke” ESG considerations, executives from many of the world’s leading consumer packaged goods, food and beverage, and home and personal care companies presented to the investment community seeking to reinforce their investment thesis and attract new shareholders.

Amid the discussion of capital allocation strategies, consumer buying trends and marketing priorities, it was impossible to ignore the significant breath, time and ink expended on the business-critical issues of sustainability, cultivating a diverse workforce and implementing a thoughtful approach to board composition. Touting third-party certifications, progress against diverse hiring objectives and new recyclable packaging initiatives, the world’s leading companies were clear in their intent to embed ESG policies as a core component of their business strategy.

We found that nearly every company presenting at the event dedicated at least one slide to ESG strategy, with nearly 20% of participating companies devoting five or more slides to this topic. This represents a considerable change from previous presentations. Among the 20 companies that participated in both the 2023 and 2019 conference, we found that discussion around ESG topics in the most recent presentations nearly doubled (96% increase) versus just four years ago.¹ These numbers suggest that predictions that ESG’s importance is diminishing may be overblown.

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¹ Note: “Discussion” defined as presentation slides focused on ESG/DEI policy

Both in the boardroom and among large institutional shareholders, it’s clear that executives believe thoughtful ESG policies remain critical to corporate growth and success. Particularly in the consumer goods sector, shifting expectations among customers are driving companies to take innovative approaches around materials use, introduce “natural” product lines and play a more impactful role in the communities in which they operate. In the fierce competition for talent, conscious policies can also be a key differentiator, as employees increasingly seek purpose-driven organizations.

While decisive action underpins industry leadership, so too does effectively articulating how investment in ESG strategy will drive financial growth. Communicating the inherent value in what one company described as “integrating purpose into strategy” is essential to earning credibility with the investment community, customers and employees. For the majority of the corporate and investment community, a diligent ESG program is not a political issue, rather central to long-term growth and value creation.

What we heard

• Delivering growth and “doing good” are not exclusive – purpose and impact are central to long-term value creation

• Creating branded ESG programs is helping drive awareness among both employees and consumers

• Focusing on a few issues most critical to each business (i.e., materials sourcing, human rights, packaging) is essential to a successful ESG program