Are ESG commitments only a advertising and marketing train for companies? GlobalData analysis seems to be into this.
Regardless of 2023 being the planet’s warmest yr on document, companies don’t imagine that wider {industry} is taking atmosphere, social and governance (ESG) points fully severely.
GlobalData’s ESG Sentiments Polls This autumn 2023 survey, carried out throughout the corporate’s community of B2B web sites, discovered that 54% of respondents imagine that “For many firms, ESG is only a advertising and marketing train”, with this determine having been rising repeatedly from a latest low of twenty-two% in Q3 2022.
“After we take a step again and contemplate that the aim of most companies is to generate revenue and develop their market share, it’s unsurprising that many have latched onto the thought of utilizing ESG as a advertising and marketing alternative,” commented GlobalData’s thematic intelligence analyst Amalia Maiden.
“Nevertheless, when firms publish ESG manifestos that lack integrity or don’t contemplate sustainability objectives as concrete targets, it in the end results in a breakdown in belief from workers and prospects.”
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By GlobalData
Regulators have been working onerous to try to cut back the prevalence of greenwashing throughout the board. In 2023, the UK finalised its Sustainability Disclosure Regulation, which governs the labelling and disclosure of sustainability-related funding funds, whereas the EU opened for session the Sustainable Finance Disclosure Regulation, which is geared toward lowering greenwashing and offering higher transparency within the funding market.
Of the evolving regulation surrounding greenwashing, Maiden added: “Corporations should show their credibility beneath unbiased evaluation in the event that they select to make use of sustainable phrases. Whereas that is simply the beginning, it exhibits the promise of presidency motion via regulation to cut back greenwashing and improve company accountability.”
GlobalData’s survey additionally confirmed that ESG isn’t perceived to be a serious short-term concern for companies, with macroeconomic elements similar to inflation and geopolitics themes seen as extra imminent threats. Whereas 46% of respondents ranked inflation as most certainly to impression their enterprise within the subsequent 12 months, ESG was simply 4%.
“Sadly, it’s easy short-termism,” defined Maiden. “ESG isn’t as robust an imminent menace to companies as excessive inflation or geopolitics. Nevertheless, local weather change and environmental destruction are vital elements behind rising geopolitical tensions, growing prices, and diminishing provides of important sources, impacting all companies.”
Of how companies ought to strategy ESG as a part of their methods, Maiden added: “Corporations should first contemplate the important thing polluting and environmentally damaging points of their particular enterprise operations and the areas of their enterprise construction which are in danger from the long run disruption of local weather change and the inevitable renewable transition will deliver.
“An excellent place to begin is to calculate annual greenhouse fuel emissions, a compulsory exercise for a lot of massive firms, and to benchmark this towards {industry} requirements to establish key areas of concern and set targets for emissions discount throughout the enterprise that target the corporate’s particular construction and issues. Nevertheless, for all firms, selecting to buy electrical energy from renewable sources will assist drastically cut back their Scope 2 emissions.”
