It’s now or never: Is ESG on the agenda for finance leaders?

Over the past few years, however, awareness of environmental issues has reached a tipping point in society, because of climate change. Social inequality has grown, and the problem has been compounded by the Covid-19 pandemic. As a result, people are now demanding that governments and businesses do their bit to tackle these challenges.

The commercial world has been forced to adjust. Legislation is focussed on reducing the impact of companies, but they have also responded to public sentiment. Customers are voting with their wallets, employees are choosing brands that care, and investors have realised they can make money backing businesses solving these problems.

This awareness has also amplified the concept of environmental, social and corporate governance (ESG). While ESG has been around since the 1960s, as a tool for investment funds to focus on social and environmental outcomes, it has only reached prominence recently.

“ESG reporting is about organisations evidencing their contributions towards sustainable global economies that protect our planet, with all of the splendour and beauty that David Attenborough describes,” said Kye Gbangbola, founder of Total Eco Management, on Protiviti’s Collaboration Forum.

“Investors and staff have shifted their support to sustainable organisations and there is growing legislation around ESG reporting. The Companies Act now requires directors to produce a report on gender, greenhouse gases and human rights issues. There are also stock exchanges around the world that will only list companies with a sustainability report.”

Protiviti is launching its 2021 Global Finance Survey this month and is keen to hear from finance professionals and business leaders. There are questions about developing a global workforce, environmental, social and governance issues, human capital reporting, and the increasing role of technology.

Last year’s survey, which was published in October 2020, painted a picture of life during the Covid-19 pandemic. Finance leaders were focused on cash management, funding, and contingency planning in the short term. But the results showed that digital transformation and developing strong internal cultures remained important long-term goals.