Survey Found that 64% of UK Businesses have no ESG Policy

The Conference of the Parties to the UN Convention on Climate change is an annual event where world leaders congregate to talk about climate issues. Since the UK will be hosting this year’s COP26, a survey of 1,000 companies was conducted to investigate local attitudes to climate change issues. The key finding of the survey was that many businesses lack awareness and follow-through where environmental, social, and governance (ESG) goals are concerned.

Firms all over the world are facing increasing pressure to be proactive about ESG targets. The pressure is mounting because there is proof that sustainability goals are good for business. Performance measures like revenue and earnings per share are used to determine annual bonus levels for C-suite-level executives. But, as the earth is getting hotter and greenhouse-gas emissions do not seem to be tailing off on their own, activist investors are using their leverage to push for new performance rewards. Now, executives will have their bonuses linked directly to the attainment of specific ESG goals.

Executive pay is not the only thing at stake for companiesthat do not embrace ESG initiatives. Reputations may get tarnished should a company fail to implement a sturdy ESG plan. These are not merely pie-in-the-sky consequences for lacking an ESG approach. The pandemic demonstrated practically just what a good ESG strategy could do for a company. When COVID-19 caused stock markets everywhere to plummet, ESG-conscious companies suffered fewer losses than their non-compliant counterparts. Savvy investors who were prescient enough to employ an ESG investment strategy saw wins in a time when so many people were only experiencing losses.

Corroborating this trend is research conducted by the Bank of America. The BOFA found that firms with well-placed ESG infrastructures performed measurably better than companies without any ESG targets.

The popular perception of environmental, social, and governance approaches is that they only involve recycling and hiring more women. But ESG is so much more than limiting the use of harmful materials, cutting carbon emissions, and increasing employee diversity. It involves varied and fascinating work that has inspired different sectors of the economy in different ways. Following closely in the steps of the financial industry, the legal sphere, for example, has adopted ESG strategies in creative ways.

For almost two years, law firms around the world have implemented ESG clauses in various contracts. Legal activities relating to sustainability have seen an unprecedented upsurge over the last few years. Lawyers have been busy with everything from supermarket chain solar panel installations to implementing due diligence procedures in lucrative M&A deals.

The legal sector has been so industrious when it comes to sustainability goals that it has even gone so far as to holdwhole nations to account. Lethal wildfires in Portugal led a group of youth to contend that there were not enough global warming counteractive measures in place. The litigation firm Hausfeld successfully took this case to the European Court of Human Rights.

Increasingly, the need for regulations and policies surrounding ESG initiatives is becoming clearer. Currently, there is a severe lack of guidelines for businesses wishing to set up ESG practices. That is why the British Chambers Council has made it their primary task to assist as many businesses as possible as they strive to meet global sustainability goals. By providing education and an administrative support structure, the Council hopes to help companies better perform their ESG duties.

According to the BCC survey, UK businesses could also use some help in the sustainability communications department. Marketing consultancy firms specializing in sustainability issues can assist corporations whenever they need to disclose to shareholders – and the general public – what their exact sustainability strategies are.

Further assistance in communications comes from the Competition and Markets Authority (CMA), which recently issued a ‘Green Claims Code.’ These guidelines forreporting ESG claims will help marketers communicate efficiently with corporate stakeholders about sustainability-related goals and procedures.

Even if COP26 is postponed, like last year’s event was, there would still be a dire need for climate–conscious corporate strategies. Our world is becoming increasingly allergic to human activity, as evinced by torrential rains, melting polar ice caps, and searing rises in temperature in ordinarily balmy places. If we do not try our best to mitigate the climate challenge now, things will only worsen, making it harder to effect positive changes in the future.

It will be difficult to conduct any kind of business if the literal ground that companies are built on is crumbling as financial transactions take place. Implementing sustainable strategies will benefit not only the climate but the lives of the people participating in the economy as well.