Three out of five businesses have admitted to losing out on work as a result of environmental, social and governance (ESG) issues within their own company.
A total of 59% of senior executives across eight global sectors revealed that poor ESG performance is hitting their company hard, according to a survey by legal and business-services provider DWF.
The survey shows that 40% of companies across the world said they found recruiting key talent difficult because their ESG policies are seen as “weak”.
More than half of respondents (56%) rated the ESG performance of their own company as either neutral or "weak".
Just under half (46%) said stakeholders have increased pressure on ESG matters relating to their own business.
Kirsty Rogers (head of ESG at DWF) said: “The clear message from our survey is that companies not only understand the need to have a strategy for ESG, but understand that, without one, there are clear costs. These costs could include damage done to their business, to the point of affecting their licence to operate.
“Following COP26, it is even more clear that companies have a huge role in driving the global transition, while also improving social issues and driving progress on governance. To achieve their goals, they need a clear, ambitious and transparent ESG strategy.”
In the survey of 480 senior executives in 13 countries, only 35% of respondents said they had fully considered the ethical and legal implications relating to ESG disclosure and commitments.
Many companies are playing it safe: 47% said they will limit their disclosures to those that they believe will not create any legal issues, while almost the same number (48%) were “still thinking about how to best handle ESG disclosures from a legal perspective”.
A total of 43% of respondents say that in-house counsel play a lead role in setting and delivering ESG strategy.