Evidence overwhelmingly suggests that companies, which get their ESG proposition right can create more business value. By paying attention to ESG concerns, companies don’t compromise their returns – rather, the opposite.
But even as the case for a strong ESG proposition becomes more compelling, an understanding of how ESG criteria link to value creation is often less comprehensive. This can lead to investor concerns and mistrust. According to a recent Workiva survey, 52% of UK investors find it difficult to trust a company’s actions and what they say, when it comes to the environment and society.
Against this backdrop, companies walk a fine line: they must actively show themselves to be good corporate citizens, while proving that any investments in sustainability boost business performance. So how can businesses get this balancing act right, and address stakeholder concerns?
The debate around ESG and its true fiscal value
There is plenty of discussion in the investor community around the importance of ESG to the future viability of a company.
Some echo Larry Fink’s opinion that it is critical for long-term success. Kevin O’Leary, venture capitalist and entrepreneur, founder of O’Leary Ventures and known as one of the investors featured on the American TV series Shark Tank, summed it up in a recent conversation on ESG and capitalism: “ESG is not a marketing scam anymore… If you don’t show people that you care about ESG and sustainability,…
