The center of gravity in ESG is shifting, which presents a fresh set of challenges—and opportunities—for corporate America’s CEOs, as detailed in a new report by The Conference Board.
While major institutional investors were once the most consistently vocal stakeholders driving companies’ ESG agendas, today, regulators and business partners are exerting increasing influence. At the same time, companies are facing opposition to their ESG agendas, with 61% of surveyed US firms saying “ESG backlash” will stay the same or increase in the next three years.
“As CEOs seek to integrate sustainability more deeply into their business strategy, they will face the challenge of not having their sustainability initiatives driven by generic regulatory requirements, but instead shaped by external factors such as customer demand, the state of sustainability in their industry, and the interplay of technology and sustainability,” said Merel Spierings, Senior Researcher at The Conference Board and co-author of the report.
This evolving landscape calls for CEOs to take a proactive approach to ESG, including focusing on ESG-related business opportunities; assessing the ROI of sustainability investments; engaging the board as thought partners; collaborating effectively with business partners; and deciding whether to adopt a purpose statement.
Insights and findings from the report include:
-CEOs should maintain their focus on ESG-related business opportunities
–While companies are increasingly held accountable for delivering returns on their ESG initiatives, they lack a consistent methodology for measuring and reporting on the ROI of ESG
-CEOs should meet the board where it is on its sustainability journey
–Compared to traditional business objectives, companies need increased levels of horizontal and vertical collaboration to achieve their ESG goals
The report was produced in collaboration with Ramboll and Weil, Gotshal & Manges LLP. It features insights from a Chatham House Rule convening with CEOs from the US and Europe on how to best integrate ESG into a company’s business strategy and operations. To see the full report you must access the following link.
