Companies reap rewards from ESG adoption as 9 in 10 experience benefits

• Regulation, and pressure from investors and customers are the main reasons for incorporating ESG considerations into their business
• An ‘improved image’ is the single biggest benefit named by three in five companies surveyed
• Nearly all respondents expect further benefits in the future

As ESG continues to move higher up the business agenda, new research^[1] reveals the pressure points on companies to implement ESG considerations into corporate strategy and highlights the benefits of doing so.

In its inaugural global ESG research, market-leading Health, Safety and ESG risk management provider Alcumus analyses ESG adoption among businesses in the UK, US and Canada. It reveals that over half (54%) act on ESG and Sustainability due to customer and investor pressure^[2]. Other key factors are regulation, named by 55%, and company ethos/mission (50%).

The increased focus on ESG pays off

All companies surveyed already see the benefits for incorporating ESG into their business model. A cumulative 60%^[3] named the most prominent benefit to be an improved image among customers and investors, followed by enhanced productivity, business growth and reduced operational costs, named by 38%, 37% and 36% respectively. These benefits are most pronounced among companies with over 250 employees, who have mandatory reporting and regulatory obligations to fulfil.

Most companies surveyed (97%) expect to see further benefits that a focus on ESG performance can have for their business: nearly a third (28%) expect to see improved employee satisfaction, a key factor in buoyant talent markets, and a quarter citing increased productivity (25%), improved access to investment capital (23%) and reduced operational costs (22%).

David Picton, SVP of Sustainability at Alcumus, says: “It is clear that the business case for ESG is strengthening. Customers and investors are making their expectations clear when it comes to safer, healthier and more responsible trading. And organisations are responding – for good reason. While effective ESG adoption comes with upfront investment, the mid to long-term benefits are significant and it’s an opportunity to not be missed. It’s becoming clear that organisations which don’t put their people, their governance and the planet at the heart of what they do will struggle to thrive or even survive in the future.”

“Large organisations are already moving rapidly forward with ESG, with many smaller ones following suit, and those who are not acting now will fall behind. Tackling the climate crisis has become one of the key issues facing all societies, but it is equally important that businesses must address social and economic issues too in their core ESG strategies. It will remain important that the collective efforts of policy makers, businesses and individuals continue to go hand in hand so companies of all sizes can act more responsibly and reap the benefits.”

“At Alcumus we are leading the way with ESG data visibility, quality, transparency and the integration to operational processes. Our new management and analytics platform tracks 11 key ESG aspects, including Modern Slavery, Carbon, Waste, Anti-Bribery and Social Value – it’s the first of its kind to link material ESG factors such as these together into a single platform, aligned to international best practice to help larger companies to get better and smaller ones to get started.”

[1] Online survey with a sample of 621 businesses (207 in each of US, Canada and UK) conducted between 28 September and 11 October 2021 among senior managers working a role which demands knowledge of ESG or Sustainability requirements or processes for the business

[2] Pressure from customers named by 36%, pressure from investors named by 42%

[3] Improved image with customers named by 46%; improved image with investors named by 33%