Customers Cited as Primary Stakeholders Creating Pressure to Act on Sustainability Issues; 86% of Business Leaders Say Sustainability Investments are Protecting Their Organization from Disruption
A new Gartner, Inc. survey revealed that 87% of business leaders expect to increase their organization's investment in sustainability over the next two years. Customers are the primary stakeholder group creating pressure for organizations to invest or act on sustainability issues, selected by 80% of executives, followed by investors (60%) and regulators (55%).
'Sustainability enables businesses to cope with disruption,' said Kristin Moyer, Distinguished VP Analyst, Gartner. 'Economic uncertainty, geopolitical conflict and escalating materials and energy costs are forcing businesses to reexamine all forms of expenditure. This focus on essentialism, in combination with increasing stakeholder desire to see progress on environmental, social and governance (ESG) goals, creates new opportunities for enterprises to grow while mitigating cost and risk.'
Corporate disclosures around environment, social, and governance (ESG) factors are becoming increasingly important as organisations seek to ensure that public perceptions of a brand align with an organisation's values.
In part, this is driven by consumer demand for more ethical business. Yet there is also the increasing link between ESG performance and financial investment.
As ESG reporting grows in importance, there are multiple regulatory mandates which surround it. In the EU, for instance, the Corporate Sustainability Reporting Directive (CSRD) requires large companies to disclose information on exactly how they manage their social and environmental challenges. Meanwhile, in the US, the Securities and Exchange Commission (SEC) has published proposed rules that would require public companies to disclose extensive climate-related information in their filings.
One of the most important trends in the private sector-primarily among publicly traded companies, but increasingly among small and independent firms as well-is the analysis of business practices through the lens of environmental, social, and governance (ESG) issues.
Beyond just the 'bottom line,' companies are being asked to open the aperture of success metrics to include how their everyday activities either positively or negatively impact life beyond their four walls. Consumers are becoming increasingly concerned about whether companies align with their best interests, while other key stakeholders (from investors to the leaders of communities where firms operate) want to see a greater emphasis on the public good.
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