Moksha Akil 19 Oct 2023 // 8:23PM GMT
New research shows that companies worldwide are at risk of losing business if they don’t take concrete action on ESG issues — and tell the public about it.
SEC Newgate’s third annual ESG Monitor, based on a survey of consumers in 12 countries, found a significant surge in community interest regarding ESG issues. The results of the survey suggest a potential tipping point in public sentiment, underscoring the imperative for companies to authentically address the impact they have on people and the planet.
Key findings from the survey include a notable increase in interest in ESG issues, with 67% of respondents rating their interest at seven or more out of 10, a rise from 56% in 2022. Moreover, an overwhelming 77% of respondents agreed that it is crucial for companies to take tangible actions on ESG issues, and 71% emphasized the significance of companies speaking out on issues vital to their employees and customers.
Fiorenzo Tagliabue, Group CEO of SEC Newgate, emphasized that the public desires both action and communication from companies.
“We know some companies are staying quiet about their actions because they’re worried about being accused of being 'woke,’” Tagliabue said. “The clear trend that we see through the first two ESG Monitor reports that we ran, and which is confirmed in the 2023 ESG Monitor, is that people care deeply about ESG and they expect corporations to show leadership in delivering positive environmental and social outcomes from their operations.”
There is a discernible generational difference, with millennials showing a higher inclination to consider ESG issues in their decision-making processes. For instance, when evaluating investments and potential job opportunities, millennials consistently rated the importance of ESG issues higher than baby boomers.
The survey suggests an overall positive trend of corporations across various industries and countries responding and taking action on ESG issues. However, skepticism remains regarding whether companies are fully committed to addressing these issues, with concerns raised about environmental management, worker exploitation, and prioritization of profit over community well-being.
The research emphasizes the need for companies to genuinely attempt to address ESG issues, without passing the costs for better performance onto customers. The majority of consumers (68%) agree that companies should clearly communicate the results of their ESG efforts, advocating for transparent reporting in a consistent manner. Interestingly, while consumers exhibit strong interest in ESG issues, a significant proportion (89%) express a lack of trust or uncertainty regarding companies' claims about their ESG activities or performance.
Sue Vercoe, managing director of SEC Newgate Research and partner at SEC Newgate Australia, reiterates that an effective ESG strategy is fundamental to a company's reputation.
“It’s clear that an effective ESG strategy is fundamental to reputation these days. Consumers expect authentic corporate citizenship and financial pressure around cost-of-living is not denting those expectations,” Vercoe said. “The first thing corporates need to do is look closely at their impacts on people and the planet. When it come to communications they need to narrow their focus to the ESG actions that matter most to customers.”