Global ESG Monitor: key insights

October 20, 2022

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SEC Newgate ESG Team

People around the world expect companies and governments to take action on Environmental, Social and Governance principles despite the economic and geopolitical shocks of the past 12 months, according to the annual SEC Newgate ESG Monitor. Read the key insights of the 2022 edition.

The second SEC Newgate ESG Monitor surveyed more than 12,000 people across 12 countries and territories – Australia, Colombia, France, Germany, Hong Kong SAR, Italy, Poland, Singapore, Sweden, United Arab Emirates, the United Kingdom and the United States.

Of the three ESG pillars, environmental performance remains the single biggest driver of perceptions about companies’ performance globally. Even though community interest remains high for both social and environmental issues (at 7.3 out of 10 and 7.2 respectively), nearly half of those surveyed (46%) cited an environmental concern – unprompted – as the most important ESG issue for companies, ahead of social (28%) or governance-related issues (10%).

SEC Newgate CEO and founder Fiorenzo Tagliabue said: “Our second annual SEC Newgate ESG Monitor shows that action on ESG issues is a must for businesses around the world. ESG, despite global geopolitical issues, remains a key Issue of our time. People, especially younger generations, expect the business community to use its leadership and power to drive positive change and address core issues like climate change and social inequality.”

With the flow-on effects of COVID-19 and the Ukraine war rippling across the globe, the rising cost of living tops people’s concerns for their country’s future. Most (79%) rated this at 8 or more out of 10, followed by healthcare (79%), secure and affordable food (77%), and secure and affordable energy and fuel (75%). While the community is looking for reassurance on life’s immediate ‘bread-and-butter’ needs, when asked to rank issues needing attention, climate action and the transition to renewables jump into the ‘Top 10′ priorities.

Both cost-of-living concerns and reputation influence how people choose which companies to do business with. While price and product/service quality are the top two considerations in choosing banks, energy providers and grocery stores, company reputation is consistently a top 5 factor, as are a company’s environmental practices. Corporate values are also an important consideration for many consumers.

The care factor on ESG issues when choosing companies to buy goods and services from is strongest among people who identify as LGBTQI+, under 35s, business owners and those doing well financially.

Expectations that companies should take ESG action, regardless of the economic landscape, are high: 78% agree companies have a responsibility to be a good citizen, 71% think they could be profitable while also performing well on ESG, and 71% expect them to launch ESG action, no matter how small.

Overall, companies received lukewarm ratings for their ESG performance, with small firms scoring slightly better than large businesses (at 6.0 out of 10 vs. 5.7). The survey shows that corporates need to be seen to be ‘doing the right thing’ and being ethical, while small companies have more latitude to take action through community support and symbolic causes.

ESG is still a huge communications challenge. Globally, 72% want companies to communicate their ESG efforts more clearly, and 71% think there should be a consistent approach to ESG reporting. In turn, the average rating of how informed people feel about companies’ ESG activities and performance sits at a mere 4.7 out of 10. Trust and transparency are big issues, with the community highly sceptical of how honest companies and governments are about ESG, and calling for more public sources of information about their performance to help guide consumer choice.

There is however a disconnect, with people seeing their own ESG behaviour in day-to-day purchasing decisions as less important than the ESG conduct of companies. And while they think there should be more information available about ESG performance, just 1 in 3 have ever actively researched the issue. This is partly because ESG is still a relatively new concept for consumers, partly because of the lack of clear and consistent reporting mechanisms or cues that resonate with consumers, and partly because they expect companies to embed good ESG practices into their business-as-usual behaviours.

People are prepared to punish bad corporate behaviour though, with 1 in 2 having used or avoided a product or service in response to an ESG issue. On the flipside, some 69% are ready to forgive organisations that admit their mistakes and commit to doing better.

And while most consumers still think governments and corporates should pay the costs of ESG, nearly half (46%) would be personally prepared to pay more for better ESG performance – despite the cost-of-living pressures being felt so acutely around the world.

The SEC Newgate ESG Monitor is an annual benchmarking index to measure global sentiment, so countries can track their performance year on year as well as compare their ranking with peer countries around the world.