Essity's 2025 EcoVadis Platinum Medal: A Strategic Indicator of Long-Term Value Creation in ESG-Driven Markets

In an era where environmental, social, and governance (ESG) performance increasingly defines corporate competitiveness, Essity's 2025 EcoVadis Platinum Medal stands as a testament to its leadership in sustainability-a distinction that may also signal a strategic edge in long-term value creation. With an overall score of 88 out of 100, placing it in the top 1% of global companies assessed by EcoVadis, Essity has demonstrated "Outstanding" or "Advanced" ratings across all four key categories: Environment, Labor & Human Rights, Ethics, and Sustainable Procurement according to the EcoVadis assessment. This achievement, coupled with strategic financial moves such as its $340 million acquisition of Edgewell's feminine care business, underscores how ESG leadership can translate into both market differentiation and financial resilience in the hygiene and health sector.

ESG Leadership as a Competitive Differentiator

Essity's EcoVadis recognition is not an isolated milestone but part of a broader narrative of sustainability integration. The company's inclusion in Corporate Knights' 2025 Global 100 and Europe 50 rankings further cements its status as a sustainability leader, with sustainable revenues growing at twice the rate of industry peers. This outperformance is not accidental. Essity's governance model, which ties CEO bonuses to sustainability targets, reflects a deep commitment to aligning ESG goals with corporate strategy. Such alignment is critical in an industry where consumer preferences are shifting toward brands that prioritize environmental stewardship and ethical practices.

Comparatively, Essity's direct competitors, such as Kimberly-Clark and Procter & Gamble (P&G), lag in ESG metrics. Kimberly-Clark's 2025 ESG score of 27.5 (medium risk) highlights gaps in sustainability performance relative to Essity's Platinum standard. While P&G's ESG score remains undisclosed, its reliance on S&P Global's Corporate Sustainability Assessment methodology-a framework that evaluates companies against industry peers-suggests a less proactive approach to sustainability leadership. This contrast positions Essity to capture market share in ESG-conscious segments, where investors and consumers increasingly demand accountability.

Financial Implications of ESG Integration

The financial rationale for Essity's ESG-driven strategy is evident in its recent acquisition of Edgewell's North American feminine care business. This $340 million deal, expected to close in early 2026, adds high-margin brands like Carefree and Playtex to Essity's portfolio, aligning with its focus on "high-yield categories in attractive geographies". The acquisition is projected to generate $35–45 million in adjusted EBITDA for Edgewell in 2026, while bolstering Essity's presence in a $540 billion mature market. Such strategic investments, underpinned by ESG credibility, enable Essity to expand profitably while addressing unmet consumer needs in sustainability-sensitive categories.

Meanwhile, P&G's 2025 financial results-flat net sales of $84.3 billion and a 2% organic sales growth-highlight the challenges of competing in a sector where ESG expectations are rising. Despite cost-cutting measures that reduced SG&A expenses by 240 basis points, P&G's gross margin contraction and reliance on core business segments underscore the limitations of a less integrated ESG strategy. In contrast, Essity's ability to link sustainability to innovation and market expansion suggests a more resilient growth model.

ESG as a Long-Term Value Driver

The hygiene and health sector's future hinges on its capacity to address global challenges such as resource scarcity and demographic shifts. Essity's 2023 Annual Report emphasizes its focus on social and environmental sustainability, structured under the European Sustainability Reporting Standards (ESRS), which aligns with regulatory trends in the EU and beyond. This proactive stance not only mitigates risks but also opens avenues for partnerships with stakeholders prioritizing decarbonization and circular economies.

For investors, Essity's ESG leadership offers a dual benefit: reduced exposure to regulatory and reputational risks while enhancing access to capital. The company's sustainable revenue growth-outpacing peers by a factor of two-demonstrates that ESG commitments can drive innovation and operational efficiency. As markets increasingly reward transparency and accountability, Essity's Platinum Medal may serve as a proxy for its ability to navigate the transition to a low-carbon economy without sacrificing profitability.

Conclusion

Essity's 2025 EcoVadis Platinum Medal is more than a badge of honor; it is a strategic asset in a sector where ESG performance is becoming a non-negotiable criterion for success. By embedding sustainability into its governance, operations, and growth strategy, Essity has positioned itself to outperform competitors in both ESG ratings and financial outcomes. As the hygiene and health industry evolves, companies that fail to match this level of integration risk being left behind-proving that ESG leadership is not just a moral imperative but a financial one.