The buzz surrounding sustainability and corporate reporting on environmental, social and governmental (ESG) issues has settled down and momentum seems to have slowed, but that perception does not reflect the work being done in boardrooms across the country.
“The truth is, when any game-changing new business thinking arrives in the pervasive way sustainability and ESG has, that trend can often peak rapidly,” according to Big 4 firm EY in its recent report, C-Suite Insights: Sustainability & ESG Trends Index. Nevertheless, ESG is at the top of corporate agendas in 2023 and beyond, according to the survey of more than 500 top executives at companies of least $1.5 billion in revenue.
In fact, every respondent reported that sustainability and ESG issues are important to their organization, with 87% saying ESG is extremely important to long-term success.
If the SEC proposal regarding climate-related disclosures for U.S. public companies is finalized this year, 84% of leaders say their organization is prepared to act. The remaining 16% indicate that their organization is unprepared, or they are unsure whether their organization is ready.
Additional findings include:
- Nearly half of respondents (48%) say their organization is working on ESG measurement and reporting.
- Over 4 in 5 (82%) respondents say their organization has a public carbon reduction commitment. Of those, 82% say their organization set a goal to reach net zero by a specific year.
- Many organizations are adopting sustainability and ESG initiatives to improve overall employee conditions, with 61% reporting that addressing employee health and well-being is critical to the success of their organizations. Fifty-eight percent believe in addressing economic impact, including fair wages, and 87% support and report diversity in their workplace.
- Fifty-four percent of leaders now see environmental issues, and 52% view technology, as emerging sustainability and ESG risks.
- Organizational structures are changing to manage ESG, with 81% of survey respondents saying they have a chief sustainability officer or equivalent position within their leadership team.
“While one survey cannot capture the full breadth of sustainability and ESG initiatives underway in the business landscape, corporate America is moving beyond seeing these simply as a trend,” the study says. “It is clear that sustainability and ESG will remain business imperatives for the year ahead.”