According to the new Sustainability in the Spotlight 2024 report by Diligent and Spencer Stuart, nearly 96% of corporate boards anticipate a sustained or increased emphasis on ESG over the next five years, prioritizing diversity, equity, and inclusion (DEI) and climate change. The report highlights that directors seek more detailed data and insights on material issues to better manage the risks and opportunities related to ESG.
In March 2024, the Diligent Institute and Spencer Stuart surveyed 801 board members from public, private, and pre-IPO organisations across 14 industries. The respondents included 42% from U.S.-based companies, 36% from companies in the European Union or the U.K. (“Europe” in the report), and the remainder from companies based elsewhere globally. The report provides a global analysis and regional breakdowns, comparing responses from board directors in the U.S., Europe, and the Asia Pacific region. It also contrasts the sustainability perspectives and activities of boards in public versus private companies.
Despite the evolving nature of sustainability in the corporate world, few companies are retreating from their ESG ambitions and 53% aim to be recognized as sustainability leaders. The biggest obstacle to ESG is internal, with nearly 25% of respondents citing competing business or strategic interests within their organizations as the primary barrier to executing an ESG strategy. Despite global debates over the term “ESG,” 56% of boards still use it to describe these issues.
“Corporate boards today recognize both the risk of ignoring ESG initiatives and the reward that comes from standing strong in upholding them,” said Dottie Schindlinger, Executive Director of the Diligent Institute. “The data shows us that while ESG oversight has become an established board function, directors still need more clarity and insights to respond to regulatory demands and become better stewards of their organizations’ ESG efforts.”
The findings of the report also revealed that public backlash around ESG not being a major concern for most boards with only 3% of respondents citing it as an issue. Also, only 4% of respondents said that their organisation dialed back ESG efforts as a result of the backlash.
Seventeen percent of respondents said their organizations have changed the terminology or level of publicity around their ESG goals without altering their course. Sixty-two percent of respondents report that their organisations are enhancing ESG disclosures, reports, and filings, while 35% are focused on keeping up with evolving voluntary standards.
The survey also found that the European and Asia-Pacific boards remain more engaged with ESG than their U.S. counterparts.
