The notion that ESG hampers the bottom line is more than a myth
IBM’s recent ESG study is quite a thing, opening with the following statement: “The argument that ESG hampers a company’s ability to boost the bottom line is more than a myth — it’s misinformation that leads to poor business decision-making”
The global survey covered more than 20.000 consumers and +2.500 executives with a focus on their sustainability preferences when making employment and purchase decisions. Some really interesting data-driven findings and well worth a read:
– Contrary to popular opinion, the study found that ESG and profitability are not at odds. Top-performing companies don’t make trade-offs between sustainability, social responsibility, good governance, and shareholder value; they achieve all these outcomes at once.
– When viewed as a vehicle for driving business value—rather than a narrow reporting exercise—ESG generates insights that create opportunities and boost performance.
– ESG leaders are 43% more likely to outperform on profitability—and 52% more likely to say ESG efforts have a huge impact on profitability
– Of 95% of organizations who have developed ESG propositions, only 10% have made significant progress toward their goals. Executives name inadequate data as the greatest obstacle—even more of a hurdle than regulatory barriers and inconsistent standards
– 6 in 10 executives say they have to make tradeoffs between financial and ESG objectives. Without the ability to access, analyze, and understand ESG data, they can’t accurately predict which plans will both improve outcomes and deliver high ROI.
– 72% of executives say ESG needs to be a higher priority in their organization
– Consumers are increasingly skeptical of ESG claims. Only 20% of consumers say they trust the statements companies make about environmental sustainability, down from half just two years ago.