Abu Dhabi Sustainability Week and Masdar have released the results of a global survey that explores how businesses around the world are responding to Environmental, Social and Governance (ESG) in the wake of COVID-19.
The COVID-19 pandemic is having a profound impact on businesses’ perceptions of ESG issues, the ESG Beyond Tipping Point survey has found.
Up to 87% of the 525 executives surveyed said ESG performance is now one of their organisation’s core strategic objective, while 85% saw the COVID-19 pandemic as a wake-up call on sustainability.
Despite the pandemic, many businesses say they believe increasing their investments in environmental, social and governance will quickly pay off with 65% of respondents expecting to record return on investments in the next two years whilst 35% anticipate benefits in the next 12 months.
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Shareholders have been found as the major drivers for ESG investments to be made with 49% of the surveyed executives saying their organisations invested in ESG activities owing to its importance to their investors.
Up to 70% of respondents from Asia-Pacific agreed that their company is committed to achieving net-zone emission, while only 33% of respondents from the Middle East agreed when asked the same question.
The extent to which a company embraces ESG is becoming a crucial factor in whether people want to work for them – even more than remuneration policies for some evidenced by 52% of respondents saying they would be prepared to take a pay cut to move to a company with a better ESG performance.
Companies are also willing to increase their focus on ESG with 51% intending to create new ESG-focused management positions in the next 12 months. Organisations based in Asia-Pacific and the Middle East & Africa are leading the way in this area.
Yousef Ahmed Baselaib, executive director, strategy & corporate development at Masdar, said: “ESG has reached enough of a critical mass across all sectors that it is unlikely that we will see a return to the old profits-above-all models of the past. As we explored during Abu Dhabi Sustainability Week earlier this year, the opportunities presented by the Green Recovery will further fuel investor appetite for backing smart, sustainable companies. Those companies that ignore ESG will lose their relevance in the post-COVID era.”
Dietmar Siersdorfer, managing director of Middle East and UAE at Siemens Energy, adds: “It is extremely gratifying to see the topics around ESG and sustainability draw more mainstream recognition. These issues need to recognised not just as a showpiece of corporate strategy but as a fundamental necessity of doing business.”
Companies surveyed deliver annual revenues of $250 million or more.
Find out more about the survey.