Another facet of anti-ESG pressures is showing itself in corporate cost cutting trends. For ESG/sustainability professionals who have been through economic uncertainty before, a new EY survey of CFOs provides both a familiar tune and some new music.
“More than half (51%) of respondents say their organizations are prioritizing long-term investments in ESG programs…”
But the familiar tune that won’t go away:
“…half of respondents (50%) say they are meeting short-term earnings targets by cutting funding in areas that are also considered long-term priorities. The research identified that ESG programs are the most vulnerable to such cuts, with 37% of respondents stating their organization plans to reduce or pause spending in the next 12 months, despite considering ESG a long-term priority.”
Even companies that are ESG leaders are not immune to potential cost cutting:
“The finance leaders taking bold action are more likely to cut or pause investment in climate change and ESG priorities…”
When you get right down to it, ESG should be able to demonstrate adequate value (return on the company’s expense/investment). In the past, we ESG/sustainability professionals used garbage economics to prove our value, but that happily may now be a relic. Even so, given the current atmosphere of anti-ESG sentiment, SCOTUS rulings shooting down DEI programs and perceptions that the House Financial Services Committee may create from their “anti-ESG month,” additional – yet subtle – pressures may be on your ESG budget.
Saving your job or ESG programs is increasingly dependent upon how well you quantify and communicate your value. If you need some help, we have resources such as this Guidebook on Communicating ESG Value with practical tips and guidance.