ABU DHABI, Abu Dhabi Sustainability Week (ADSW), the global platform for accelerating sustainable development, and its host Masdar, released today the results of a global survey, which explores how businesses around the world are responding to Environmental, Social and Governance (ESG) issues in the wake of COVID-19.
ESG Beyond Tipping Point surveyed 525 executives from global businesses that deliver annual revenues of USD 250 million or more. It suggests that the COVID-19 pandemic is having a profound impact on businesses’ perceptions of ESG issues.
The research found that 87 percent of respondents indicated that ESG performance is now one of their organisation’s core strategic objectives, while 85 percent saw the COVID-19 pandemic as a wake-up call as to the importance of sustainability.
The research also revealed 65 percent of respondents expect to realise the financial benefit of ESG investment within the next two years, including 35 percent who expect it within the next 12 months.
Yousef Ahmed Baselaib, Executive Director of Strategy & Corporate Development at Masdar, said, "ESG has always been part of the Masdar’s DNA and continues to be as the company delivers on its mandate of seeking quality investments in renewable energy and sustainable technologies. Fifteen years on since Masdar was formed, ESG has reached enough of a critical mass across all sectors that it is unlikely that we will see a return to the old profits-above-all models of the past. As we explored during Abu Dhabi Sustainability Week earlier this year, the opportunities presented by the Green Recovery will further fuel investor appetite for backing smart, sustainable companies. Those companies that ignore ESG will lose their relevance in the post-COVID era."
49 percent of the respondents said that they are prioritising ESG because it is important to investors.
At a sector level, the research found that balancing profit with sustainability is easier for some sectors than for others, with 68 percent of respondents from the technology sector agreeing they were able to balance customer demands for sustainability with shareholder expectations for profits. However, responses from the transport sector were much lower, with only 38 percent agreeing that the sector was able to balance customer demand and shareholder expectations.
The ESG research was supported by a series of high-level interviews with industry leaders, including Dietmar Siersdorfer, Middle East and UAE Managing Director at Siemens Energy, who said, "It is extremely gratifying to see the topics around ESG and sustainability draw more mainstream recognition."
"These issues need to be recognised not just as a showpiece of corporate strategy, but as a fundamental necessity of doing business. As a company founded to drive the energy transition and promote ESG and sustainability values, Siemens Energy has set an ambitious target of net zero emissions by 2030. We are dedicated to energising society in line with the UN’s Sustainable Development Goals, to ensure the highest impact on societal development," he added.
Strikingly, 52 percent of respondents said they would be prepared to take a pay cut to move to a company with a better ESG performance, while 51 percent said they intend to create new ESG-focused management positions in the next 12 months.
Source: Emirates News Agency