From: Environment + Energy Leader
March 22, 2022
Businesses are not slowing their environmental, social and governance investments and feel that there should be formal reporting processes — and almost all of them believe their brand is impacted by ESG issues, according to a study from NAVEX.
The risk and compliance management software company surveyed 1,250 managers and executives and found 46% of them will increase their organization’s focus on ESG this year. Of the responses, 83% say they strongly or somewhat agree their brand’s reputation is affected by ESG efforts.
While the survey was taken before the United States Securities and Exchange Commission formally proposed rules for climate-related mandatory disclosures, NAVEX discussed such reporting as an important piece of corporate ESG initiatives in 2022. Of companies surveyed that don’t have a system in place to measure and report on ESG metrics, 70% of respondents say they should, up 14% from last year.
The SEC is seeking disclosures on Scope 1, 2 and 3 emissions, among other environmental and climate concerns. The rules are in a 60-day public discussion period.
The survey found that one in three respondents believe their organization’s performance against ESG metrics is very effective. There was a drop in those managers who felt their companies are performing very effectively across all ESG items compared to 2021.
With ESG tracking and reporting becoming increasingly a priority, tools to help in those areas have also evolved, such as recent offerings that track supply chain ESG risks from Avetta or an IsoMetrix system that tracks ESG data to efficiently report data.
For US businesses surveyed by NAVEX, more than half (55%) say they plan to increase their ESG spending in 2022. Companies in the UK also see that financial effort as a priority, as 51% plan to increase their spending.
Reuters reported at the end of 2021 that ESG investing had increased to $649 billion worldwide, up from $542 billion in 2020 and $285 billion in 2019. ESG funds account for 10% of the worldwide fund assets, according to the report.
Of those companies that do not have formal ESG programs, 38% of US respondents strongly agree their organizations should have something in place. In the UK that number was 32% with 46% somewhat agreeing.
Another report from Next Energy Technologies found a third of companies lost business because of climate inaction.
Overall, most respondents to NAVEX feel all factors of ESG are equally important, but when broken down the environmental aspect was the highest priority across the board. Governance significantly trailed in those response.
The survey was taken in February and included managers and executives for companies with more than 500 employees in the US, UK, France and Germany.
Article link: https://www.environmentalleader.com/2022/03/esg-reporting-investing-remain-significant-priorities-for-businesses/