- New survey shows sharp increase in public interest in environmental, social and governance (ESG) issues
- Most say it’s important for companies to take action to address their impact on people and the planet and to speak out on issues that impact their customers and employees
- In most countries the public acknowledge that corporates are responding – but there’s a lot more to do and they want them to pick up the pace
- Results give clear direction on what types of actions are getting cut through with the public
In a landmark survey spanning 12 countries, global business leaders are warned that public expectations for authentic action on environmental and social (ESG) issues remain high in the face of cost-of-living pressures, and inaction — combined with silence about their efforts — could cost them customers.
The third annual ESG Monitor from SEC Newgate found that there has been a sharp increase in community interest in ESG issues despite widespread concern about cost-of-living pressures.
The research indicates that we may have reached a tipping point, suggesting the need for genuine action by corporates to address the impacts they’re having on people and the planet is no longer up for debate. Some of the main findings included:
- 67% rated their interest in ESG issues at 7 or more out of 10, up from 56% in 2022;
- 77% agree it is important for companies to take action on ESG issues;
- 71% agree that companies should speak out on issues that are important to their employees and customers.
Speaking on the findings, Fiorenzo Tagliabue, Group CEO of SEC Newgate, said: “We know some companies are staying quiet about their actions because they’re worried about being accused of being ‘woke’.
“The clear trend that we see through the first two ESG Monitor reports that we ran, and which is confirmed in the 2023 ESG Monitor, is that people care deeply about ESG and they expect corporates to show leadership in delivering positive environmental and social outcomes from their operations.
“The public wants action and wants companies to talk about what they’re doing. They think being a chief executive means acting like a leader and shying away from having an opinion on issues that are important to their customers and employees is no longer an option.”
The research shows that community opinions on ESG issues are translating into action and impacting behaviours – particularly who people vote for, the types of food they’ll eat and products they’ll buy.
Here we see some stark differences by generation, with Millennials far more likely to factor ESG issues into their decisions.
For example, when it comes to the type of investments they make, 57% of Millennials rate ESG issues 7 or more out 10 on importance, compared to 47% of Baby Boomers. When considering a job with a new employer, 58% of Millennials give a ESG issues a 7+ importance rating compared to 39% of Baby Boomers.
In a note of optimism, the survey results show the community are seeing corporates in most industries and countries respond and take action.
However, there remains scepticism over whether companies are fully on board with tackling ESG issues, with respondents calling out businesses for poor environmental management, including the use of too much plastic, worker exploitation, prioritising excessive profit over the wellbeing of customers or the community, and a slow transition to sustainability.
They want to see companies genuinely trying, even if they don’t get it perfect the first time, and to think about how they can multiply their impact by working with other organisations and empowering members of the community. They want companies to address these issues in the way they operate rather than charge extra for them:
- 69% agreed that companies can be profitable while also performing well on ESG and;
- 64% agreed that companies should not pass on the cost for better ESG performance to their customers.
The research also revealed that nearly 7 in 10 consumers across the globe (68%) agree that companies should communicate the results of their ESG efforts more clearly for consumers and investors, and similar numbers (69%) are keen for this information to be reported in a consistent way, presumably to make it easy for them to absorb as possible.
Despite their strong interest in ESG issues, very few (6%) say they often look for information or do research on a company’s ESG activities or performance and 89% say they either don’t trust, or are unsure whether they trust, what companies claim about their ESG activities or performance.
Sue Vercoe, Managing Director of SEC Newgate Research and Partner at SEC Newgate Australia, said: “It’s clear that an effective ESG strategy is fundamental to reputation these days. Consumers expect authentic corporate citizenship and financial pressure around cost-of-living is not denting those expectations.
“The first thing corporates need to do is look closely at their impacts on people and the planet. When it come to communications they need to narrow their focus to the ESG actions that matter most to customers.
“They also need to choose issues where they have credibility to speak. People are living busy lives and it can be a challenge to get cut-through and to be believed. Our research shows there is a path forward.”
The public also believes governments must do more to introduce and enforce better regulations around environmental marketing (70% agreed), which will help ensure a level playing field.
However, some countries were less concerned about government intervention than others, Colombia (79%) and Italy (75%) top the list of countries where residents think governments should introduce more regulations to support issue issues, while this drops to just 56% in Germany.
Fiorenzo Tagliabue, Group CEO of SEC Newgate, added: “Overall, it is clear from our research that consumer expectations have changed and the global community now expects organisations to think about their impacts on planet and people from the outset.
“Employers will also have to respond to generational and national differences when communicating around the ESG issue.
“The good news is that community support for ESG agendas is continuing to grow and there are now a multitude of organisations that companies can partner with to further their ESG credentials and communication these initiatives in more impactful ways.”