The M&A outlook for the rest of 2023 is challenging but that doesn't mean you should stop thinking about growth. Tor Johnson explains why you shouldn't ignore the opportunities in ESG.

If your business and management team is strong you may still attract interest from private equity houses, and there's currently a lot of activity around small to medium transactions. There are also clear reasons to be optimistic about Q3 and Q4. 

The current situation does mean that there's more scrutiny from investors, especially around financial information and strategy. We're seeing a growing focus on environmental and social governance (ESG) factors, too. Businesses need to be forward-looking, and your approach to ESG is one marker of how future-proof you are. 

What are the key opportunities for green growth?


The franchising sector held up well throughout the pandemic and remains robust in the face of uncertainty. There are more than 1000 franchises in the UK and the number of successful operations is increasing. It's an agile sector, combining the energy of entrepreneurs with the marketing investment and strategy of big business.

The ability of franchises to pivot quickly means they can respond well to ESG trends. As well as strong growth in the UK, we're seeing a lot of international expansion: in the Middle East, the USA, Canada, and Europe.

Proactive approach to ESG

Research shows that Gen Z place real importance on the sustainability of products and ethical business practises. Investors are aware of a rise in conscious consumerism and it's increasingly accepted that a good ESG strategy is good for the bottom line. Whether that's increasing productivity through a mission-focused approach, helping companies to win tenders, or driving customer acquisitions.

Similarly, poor management of ESG issues can cause serious problems for your company: for examples if your business or any company in your supply-chain is implicated in a negative ESG story, you've marketed a product as net zero when its not, or you're not getting buy-in from your employees.

Spotlight on the circular economy

There are lots of opportunities for growth in this space. Reuse, resell, and rent is a growth-driver in fashion, for example, with some companies doing it themselves and others acquiring resale platforms or partnering with service providers. 

Ensure your ESG investment is strategic

Considering ESG as part of your overall strategy, not separate from it, will gain most impact.

Take the ESG Maturity Index to see how your perceived ESG maturity compares with the relevant businesses in our 800-strong sample. You'll receive a report based on your answers with a visual comparison of how other business leaders rate their own ESG maturity. The benchmarking is available by job profile, industry and size.

How to harness these ESG-related opportunities 

Make a start and focus on progress, not perfection 

Changes can bring saving, but there can also be costs, at least in the short term. Think ‘What can we do to make a difference?’ and define what you need to do to move forward and manage risk. This might mean starting with suppliers, or with your own internal systems.

Control the controllable – and measure it

You can always control your own systems, but actionable outputs means ensuring your data is meticulous, ambition-led, and auditable. Getting advice early can help you focus on delivering what you need to achieve your ambitions. 

Don’t wait for regulation

Regulation around ESG issues is only going to increase and implementing new processes and standards is much harder than playing catch up. Key areas to focus on are carbon footprint, waste management, customer data, energy use, and labour practices. 

For more insight and guidance, get in touch with Tor Johnson.

Learn more about how our ESG strategy, risk and opportunity identification services can help you
Is your ESG Strategy clearly defined with risks and opportunities appropriately identified and managed?
Learn more about how our ESG strategy, risk and opportunity identification services can help you
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