Sustainability, climate and equity initiatives are not buzzwords or marketing trends. In today’s business environment, more and more companies view ESG prioritization, integration and disclosure as a strategic imperatives – and with good reason. Customers, employees and investors are making key decisions based on the environmental and social commitments and actions organizations are taking, and they have become savvy at spotting greenwashing.
Companies are embracing ESG reporting for a variety of reasons. According to the findings of Deloitte’s Sustainability action report, which surveyed executives about increased preparations, challenges and planned investments to meet the growing expectation for high-quality sustainability reporting information, nearly three in five executives (57 percent) report having already implemented a cross-functional ESG working group.
This is a notable increase from the previous year’s findings that only 21 percent reported having done so. Additionally, 81 percent of executives recently reported that new roles and responsibilities have been created to assist with potential ESG disclosure requirements.
It’s clear that many companies are now moving from commitment to action in how they approach their sustainability strategy. Here are the top three benefits executives are anticipating.
Talent attraction and retention
More and more employees are demanding action from their employers, and it’s top of mind for many professionals. Business leaders are being compelled to listen and act. An organization’s focus on ESG is more than a series of commitments; it represents an action plan that tells both potential and current employees that effective risk management and long-term resilience is a priority. For that reason, 52 percent of surveyed executives anticipate talent attraction and retention to be a leading benefit of enhanced ESG reporting.
Increased efficiencies and ROI
With better ESG data comes better potential operational and financial outcomes. More than half of the executives surveyed (52 percent) believe increased efficiencies and return on investment are key benefits to ESG reporting. By proactively leaning into sustainability reporting standards, companies can have access to data that helps measure relevant KPIs, provides insight into potential long-term investments and creates a loyal customer base that can drive sales.
Building stronger stakeholder trust
It’s no secret that integrating ESG within a company’s strategy can have benefits for business performance and value – and good data is important. If an organization doesn’t have reliable ESG data, stakeholders may question its commitment. Therefore, rather than considering ESG a compliance exercise, companies could benefit from investing in more tools and technologies, and our survey found that 99 percent intend to do so.
Proactive ESG disclosure readiness is essential to increasing the potential for successful business outcomes, and companies that hold themselves accountable now will be better positioned down the road. Organizations should consider looking for ways to integrate ESG programs into their overall business strategies to remain relevant and build a resilient and sustainable future.
Evan Harvey is audit & assurance managing director at Deloitte & Touche. Kristen Sullivan is global audit & assurance sustainability and climate services leader at Deloitte & Touche.
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Evan Harvey
