NORTH AMERICAN BUSINESS LEADERS LAG IN ESG ENTHUSIASM COMPARED TO PEERS IN EMEA AND APAC
VISION by Protiviti thought leadership series examines the future of ESG through exploration with global business leaders.
Global consulting firm Protiviti explores the business outlook of the future of environmental, social and governance (ESG) in 2032 and beyond in the latest installment of its VISION by Protiviti thought leadership series. The ESG survey was conducted in collaboration with the Global Centre on Healthcare and Urbanization at Kellogg College, University of Oxford, U.K. While the survey found that 98% of global business leaders cite ESG as a top factor in business success, only 25% of North American respondents think that prioritizing an ESG strategy will be an ‘extremely important’ focus by 2032, compared to 71% of their counterparts in the Asia-Pacific region and 58% in Europe.
This ‘enthusiasm gap’ could indicate a majority of North American business leaders are out of step with other leaders globally in establishing and/or achieving ESG goals. Regarding environmental factors specifically, 37% of North American executives shared that they believe their corporate greenhouse gas emissions will decline by 2032, whereas Asia Pacific and European leaders were much more optimistic at 88% and 81%, respectively.
“Every day we see more organizations setting long-term ESG goals, and these goals require clear roadmaps to achieve them. While there continue to be debate and different approaches to ESG, it’s an important topic to many stakeholders. Organizations need to be clear about their goals and objectives for addressing ESG matters,” said Cory Gunderson, executive vice president, Global Solutions, Protiviti. “Our VISION by Protiviti research indicates that ESG will remain a focus within business strategies for most industry sectors over the next decade. However, many organizations – especially those in North America – appear to be in more of a ‘wait and see’ mode and may not be on track compared to their global peers.”
In terms of spending on ESG, 64% of surveyed leaders globally expect an increase in corporate spending to manage environmental risks ten years from now. However, 61% of North American leaders report numbers that share a different reality, with responses indicating that their companies’ spending for environmental concerns will remain the same or even decrease in ten years’ time.
Generational discrepancies also arose with the younger C-suite executives (those under the age of 50) indicating that ESG will become extremely important over the next decade (60%). Overall, almost three-quarters of respondents note their company has established a dedicated ESG or sustainability post or office.
Adapting ESG Over the Next Ten Years
Over three-fourths of business leaders surveyed (78%) believe that ESG reporting will become mandatory within ten years. Fewer than half of North American business leaders (49%) believe ESG reporting will become mandatory by 2032. The survey also found that consumer demand (42%) and regulatory requirements (39%) are expected to be the top two main drivers of change within the ESG space globally in the next 10 years.
“ESG reporting is not an end in and of itself. It’s a useful mechanism to shine light onto what companies are doing and the progress they’re making toward their ESG goals,” said Christopher Wright, global leader of Protiviti’s Business Performance Improvement Solution. “Continuing to instill reporting and compliance, be it mandatory or voluntary, into ongoing business processes will help companies progress their ESG strategy over the next decade.”
Differences arise in tracking the extreme risks that companies are most worried about now and in the next decade. When assessing the highest amount of risk across the E, S and G currently facing their companies, 43% of business leaders cite the environmental factors, compared to 37% for social and 20% for governance. When asked what area within the ESG spectrum will pose the most ‘extreme risk’ in the next decade, 21% feel environmental factors, whereas 7% report they are extremely concerned about governance factors and 12% think social risks will be the most extreme risk by 2032.
The ESG survey’s respondents were 250 board members, C-suite executives and other global business leaders who work for public, private and non-profit organizations representing a wide range of industries. The survey was conducted in June and July 2022.
Learn More About the Future of ESG – 2032 and beyond
The Protiviti-Oxford survey report, “Executive Outlook on the Future of ESG, 2032 and Beyond” is available for complimentary download (free subscription) at VISION by Protiviti. The site also has an interview about the survey’s key findings with the three Oxford academics who collaborated with Protiviti on the research and co-authored the report: Dr. Nigel Mehdi, Course Director in Sustainable Urban Development and Fellow at Kellogg College, University of Oxford; Dr. David Howard, Co-Director of the Global Centre on Healthcare and Urbanisation at Kellogg College; and Dr. Vlad Mykhnenko, Associate Professor of Sustainable Urban Development and Fellow at St. Peter’s College, University of Oxford.
The survey report is one of many pieces of VISION by Protiviti research developed by Protiviti around ESG; additional content available on its VISION by Protiviti website includes:
Accelerating digital and net zero sustainability with Microsoft
AWS Energy Solutions Lead on Scope 3, ‘data obesity’ and a decarbonized future
Boardroom Buzz: Cambridge dean on the business of sustainability
Investing in ESG: A conversation with Sharadiya Dasgupta, head of Blue Dot Capital
Established in 2018, the Global Centre on Healthcare and Urbanisation (GCHU), Kellogg College, University of Oxford, brings together leading and influential thinkers in an interdisciplinary approach embracing evidence-based healthcare, sustainable urban development, and education, and provides a collaborative forum for organizations active in these disciplines.
Protiviti is a global consulting firm that delivers deep expertise, objective insights, a tailored approach, and unparalleled collaboration to help leaders confidently face the future. Protiviti and its independent and locally owned Member Firms provide clients with consulting and managed solutions in finance, technology, operations, data, digital, legal, governance, risk and internal audit through its network of more than 85 offices in over 25 countries.
Named to the 2022 Fortune 100 Best Companies to Work For® list, Protiviti has served more than 80 percent of Fortune 100 and nearly 80 percent of Fortune 500 companies. The firm also works with smaller, growing companies, including those looking to go public, as well as with government agencies. Protiviti is a wholly owned subsidiary of Robert Half (NYSE: RHI). Founded in 1948, Robert Half is a member of the S&P 500 index.
For more information, visit: protiviti.com