As the importance of sustainability and social responsibility continues to gain momentum, investors and stakeholders are increasingly holding businesses accountable for their environmental, social, and governance (ESG) performance.
However, companies faced significant challenges in meeting their ESG goals in 2022, raising concerns about the long-term sustainability of their operations, says GlobalData, a leading data and analytics company.
GlobalData’s ESG Sentiment Polls Q4 2022 reveals that only 32% of respondents said their company had an ESG strategy. This means that the majority (68%) of respondents either had no ESG plan in place (34%) or were unsure whether they had one (34%).
Cyrus Mewawalla, Head of Thematic Intelligence at GlobalData, comments: “The reluctance of many CEOs to fully engage with ESG can be attributed to the age-old view that it will hurt profits. However, our research suggests the opposite. Companies that embrace all three elements of ESG will outperform their peers. CEOs that are too slow to improve their company’s approach to sustainability will see an exodus of customers and a drop in profits far sooner than they ever imagined.”
GlobalData’s latest report, “Global Environmental Trends by Sector, 2022 – Thematic Intelligence,” reveals that climate change and related themes (including heatwaves, emissions, deforestation, and water shortages) remained in the spotlight in 2022. Financial institutions, businesses, and governments have increased their efforts to align with the UN’s sustainable development goals (SDGs). This trend will continue in 2023.
The ESG framework developed by GlobalData serves as a valuable management tool to evaluate a company’s ESG performance. It can help identify factors that lead to negative ESG outcomes and provide insights into actions that can be taken to enhance the company’s ESG performance.
Mewawalla concludes: “As the world continues to grapple with climate change and other environmental challenges, the importance of ESG performance is only set to grow. The growing efforts of financial institutions, businesses, and governments to align with the UN’s SDGs demonstrate a growing recognition of the urgency of the challenge at hand. Companies that embrace this trend and take meaningful action to improve their ESG performance are likely to be the ones that thrive in the years to come.”
