Greenwashing and short-term mindsets: Why is ESG falling down the corporate agenda?
Environmental, Social and Governance (ESG) efforts have slipped down corporate priority lists, according to a new global survey of c-suite executives that found that short-term mindsets, fears of greenwashing and a lack of internal structure are all hindering sustainability progress.
The second annual sustainability survey, conducted by The Harris Poll and sponsored by Google Cloud, of more than 1,476 top-level executives in 16 countries has unveiled corporate attitudes to ESG.
The survey found that ESG efforts fell from the number one priority for businesses to third in 2023, with many business leaders claiming they are being pressured by “external parties” to de-prioritise sustainability. As a result, driving revenue and growth and optimising client relations were listed as the top two priorities by survey respondents.
While 85% of respondents acknowledge that customers want to engage with sustainable brands, 78% felt forced to achieve sustainability-based results with reduced budgets. Indeed, 72% of respondents claimed they wanted to advance sustainability initiatives but didn’t know how to do so – up from 65% in 2022.
Greenwashing, short-termism, and a “failure to execute” ambitions were all listed as key challenges facing businesses.
Corporate greenwashing was listed as a major concern, with 59% admitting to overstating — or inaccurately representing — their sustainability activities. This builds into a wider issue about a lack of data, metrics and management to deliver on sustainability goals, with 87% wishing to deliver better management practices to ensure that sustainability is delivered and communicated accurately.
In total, 84% of business leaders believe their sustainability initiatives would be more effective if they had a better structure with clear accountability internally, while 83% believe agile team structures would improve performance.
Commenting on the findings, Google Cloud’s managing director of global sustainability Justin Keeble said: “Despite headwinds, there’s reason to be optimistic that organisations will continue to operationalise and prioritise sustainability.
“Nearly all companies (96%) have at least one program in place to advance their sustainability initiatives, and participation in programs remains mostly unchanged from 2022. Interest in organisational sustainability also remains strong, with 84% of respondents saying they care more about sustainability than before.”
Last year’s survey found that 90% of the respondents said they saw ESG as their organisation’s top priority, with most claiming that they were willing to evolve or adjust business models to improve their social and environmental impacts.
Moreover, almost three-quarters (72%) of the respondents attended at least four sustainability-related meetings every quarter, and almost two-thirds (63%) were willing to risk lower revenue in the short term to ensure sustainable development in the long term.
The 2023 Sustainable Business Leadership Report
This new report provides a detailed analysis of our 2023 Business Leadership Survey, which was taken by 225 sustainability and energy professionals. It also includes key information from edie’s Business Leadership Month (March 2023).
Delivered as part of edie’s Business Leadership Month, the 2023 Sustainable Business Leadership Survey explored the biggest drivers, challenges and opportunities facing corporate sustainability and climate action in 2023. We hosted the Survey in February 2023 and 225 professionals responded.
Click here to download the report.
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I don’t know if many of these companies genuinely want to invest in sustainability and the tracking necessary to stop greenwashing and the short-termism described above. I think so much of it is market pressure for corporations to prioritize sustainable practices, but it’s performative for a vast majority and is an unsustainable if the internal motivations aren’t there to push ESG initiatives.