ESG Performance drives Corporate Performance

Large companies globally are facing mounting pressure to provide transparency into their Environmental, Social and Governance (ESG) practices. While ESG data collection and reporting is a critical first step, organizations must move beyond compliance and focus on risk management and performance improvement to drive value. Research shows that strong ESG performance drives corporate performance, making it a critical area of focus for businesses. 

The rise of ESG to the top of the corporate agenda 

Around the world, large companies are facing an unprecedented level of scrutiny on ESG performance.  

• 87% of investors think that corporate reporting on sustainability contains greenwashing, and 82% say their clients demand that ESG factors to be taken into account (PwC)  

• 64% of consumers choose, switch, avoid, or boycott a brand based on its stance on societal issues, and change buying behavior because of a brand’s response to climate change (Edelman)  

• 72% of the global workforce will be made of Millennials and Gen Zs by 2029, who place an even greater importance on ESG concerns versus their predecessors (WEF and Marsh McLennan)

• Regulators are becoming more active in ESG by setting mandatory disclosure requirements and aligning to standards to drive comparability and improve transparency for investors 

The growing importance of a company’s ESG performance, driven by investors, consumers, the workforce, and regulators, has heightened the focus of senior executives and put ESG at the top of the Corporate agenda.

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This article was originally published on WolterSkuwer.com on February 20, 2023.  Link to the original article is here: https://www.wolterskluwer.com/en/expert-insights/the-importance-of-esg-as-a-key-drive-of-corporate-performance