Most company leaders ‘undeterred’ by right-wing backlash against ESG, report finds

Evidence has emerged that most company leaders are undeterred by a right-wing backlash against environmental, social and governance (ESG) measures and are instead looking to continue focusing on improving equality and tackling climate change.

In recent years right wing commentators and politicians, particularly in America, have sought to criticise efforts by firms to improve their ESG practices, claiming such measures are anti-business.

But a survey of more than 800 company board members in the UK, Europe, Asia Pacific and America, has found that two thirds “have stayed the course on sustainability” in response to this ESG backlash.

Under a fifth have remained committed to ESG but changed their communication around improvements.

Only a small minority, of one in 25 directors, say they have “dialled back” on ESG due to the backlash, while even fewer, one in 33, say the backlash is “a major obstacle”.

When asked to list the most important ESG issues for their firms, just under two thirds cited equality, diversity and inclusion (EDI), while three in five mentioned climate change.

Almost all (96%) of directors surveyed expect to continue with or have a stronger focus on ESG over the next five years.

A similar proportion (94%) say they have an ESG goal or metric in at least one area of their business.

ESG is vital to businesses’ reputation, according to business leaders surveyed. Two thirds said ESG was “a primary source of reputational capital”.

Three in five said such improvements around tackling climate change and improving equality were important to attracting talent. Just over half say “satisfying customer expectations” is another value of ESG.

Business leaders are also craving more information around ESG, the survey by Diligent Institute and SpencerStuart, found.

Just under half want to see more insight around sustainability to help their business, while more than two in give are keen to see more clarity in how ESG goals can connect with their business strategy.

“The ESG backlash, especially prominent in the United States, is only a minor bump in the road,” states Diligent Institute and SpencerStuart’s report into the survey’s findings.

They say that their report “reveals that companies overall remain committed to ESG and are undeterred by the backlash against it".

"Directors report that the ESG ambitions of the organisations they oversee are high — even though some may be slightly less likely to publicize them — and that they are bullish on the prospects of achieving their ESG strategies," their report adds.

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