![]() ![]() Investors may well see companies change the way they talk about ESG. The strategy should also describe the timetable and necessary resources. That is a useful starting point, but investors should look at whether the company has taken a more strategic approach in assessing where the company stands today on key ESG issues, where it wants to go, and how it will get there. Investors should expect companies to present a coherent, cohesive narrative of their company’s strategy that includes ESG-in other words, to have a business strategy that is sustainable, not just a separate sustainability strategy.Ī potential red flag is when the company has only conducted a “materiality analysis” to identify key ESG issues. Focus on strategyĪ majority of companies (63 percent) say they are increasing their focus on the business case for ESG and how it connects with shareholder value. Investors should look for companies to take five key steps to drive long-term value in this environment. Moreover, a growing number of firms also expect pushback from employees, consumers, business partners, the media, and investors.įor their part, companies should view ESG backlash as an opportunity to clarify their strategy and communications. In a recent survey by The Conference Board of more than 100 large US companies, nearly half said they have already experienced ESG backlash, and 61 percent expect it to persist or intensify in the next two years.Ĭompanies also expect it to spread: While the financial services industry, and large asset managers in particular, have borne the brunt of this pushback, a majority of companies we surveyed are concerned they will face opposition from federal and state officials and candidates. ![]() As ESG has recently become a political flashpoint, understanding its impact should be a priority for corporate leaders, because investors are likely to judge them by their responses. The backlash against ESG-the use of environmental, social & governance factors in business and investing-is real and likely to increase. Human Capital Benchmarking & Data Analytics.Corporate Communications: Getting the Next Job Done.2024: A Year In Preview (C-Suite Outlook).
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