With enhanced disclosure standards, mounting regulations, and growing investor demand, ESG has moved out of its infancy and into a more mature and concrete stage of development. However, with this comes growing pains, particularly in the US where anti-ESG backlash threatens progress. New research from the Diligent Institute gauges boardroom interest in sustainability and reveals that ESG remains important to companies globally in spite of legislative developments in the US.
The survey results indicate that European companies generally express a greater interest and enthusiasm for ESG than their US counterparts. Here are some key findings:
- 56% of European respondents view ESG issues through a lens of opportunity as opposed to 30% of US companies, who are more likely to view ESG in terms of risks.
- 50% of European companies reported effective leadership and high ambition on E&S issues, that number drops in half in the US to 25%.
- 2% of European companies report that ESG is not a priority, compared to 12% of US companies.
European boardrooms are embracing ESG whereas US boards are less enthusiastic. This may be the result of the EU’s steady development of ESG legislation through the European Green Deal. Similarly, US companies’ risk-focused approach could be a product of the lack of clear ESG regulations. EU companies currently have more legal clarity, which increases the compliance burden, but it also provides clear guidelines. In the US, a mix of state-level initiatives, federal regulatory rulemaking, and anti-ESG backlash create uncertainty, and with that comes risk. Perhaps if US counterparts were more open to seeing the business opportunities in ESG, that could change the thinking.
