A recent survey by Advanced has found that only 36% of UK senior decision markets list ESG as a business priority this year.
Up to one in four respondents said that they don’t believe their company is open and transparent about its ESG goals and achievements, while 28% noted that they could not provide tangible evidence to support their environmental, social and governance progress. Meanwhile, 69% of respondents said they weren’t working with suppliers to lower emissions.
Daniel Docherty – director of strategy at Advanced – said, “Given the extent of the many problems confronting the globe and the growing severity of environmental risks for businesses, the E component of ESG has gained increasing relevance. As enterprises with strong ESG credentials draw modern investors, it is paramount for CFOs leading the finance function to understand the potential of ESG and learn how to put it into practice.”
Docherty added that businesses should not strive to accommodate all dimensions when creating ESG policies. Instead, they should pick three-to-five quantifiable criteria that matter to their firm and audiences and match them with their corporate strategy.
He also remarked that corporations should address the concerns that affect their business as well as their impact on society and the environment.
Docherty continued, “The financial department might create a list of initiatives it will not support due to environmental issues or other concerns of the business or its shareholders. Excluded activities may be governed by national ESG regulation or international agreements, restrictions, and best practices.”
“ESG data does not exist in an informational vacuum and requires suitable contextualisation for clarity. This context may partly derive from the firm’s relative performance (having as benchmarks firms in the sector or historical performance).
“Businesses that handle ESG challenges under the direction and participation of the CFO are better equipped to produce enterprise value, while fulfilling ESG legislation reporting requirements and wider stakeholder expectations for responsible risk management. Now more than ever, the CFO ESG dichotomy should be united, and for any CFO, sustainability should become a key criterion for corporate success.”
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