Majority of FTSE100 firms have set up board-level ESG committees, research finds
More than half of the FTSE100 companies have established some form of environmental, social and governance (ESG) committee at a board level, while more than 80% have articulated a net-zero target to their shareholders, new research by Mattison Public Relations has found.
The research, published on Monday (5 September), found that the majority of FTSE100 boards now had ESG sitting in a prominent position thanks to committees and high-level strategies.
While 54% of companies now have an ESG committee in place, this figure rises to 100% in the oil and gas sector. This includes major oil & gas producers like BP and Shell, as well as mining companies such as Anglo American, BHP, Glencore, and Rio Tinto.
In sharp contrast, however, only 13% of financial service FTSE100 firms – excluding banks – had set up ESG committees.
Mattison Public Relations claims that the research highlights how ESG is rising up the corporate agenda, with FTSE100 firms also having to align to the UK Corporate Governance Code.
Maria Hughes, Director at Mattison Public Relations says: “FTSE 100 companies are taking big steps towards addressing their responsibilities on ESG. UK plc is showing its commitment to tackling climate change and reducing its impact on the broader environment.”
“If you are a FTSE100 company without an ESG committee at board level then you are now in a shrinking minority.”
Despite this rise in prominence, many sustainability professionals still don’t believe they have boardroom backing for their sustainability goals.
A separate survey of 200 directors and senior managers at large businesses has revealed that four in 10 don’t get the support they would like from their boardrooms in taking a holistic and ambitious approach to ESG challenges.
Conducted by EY, the Long-Term Value and Corporate Governance Survey polled professionals across 25 sectors and 15 nations in Europe, collecting opinions on ESG-related risks and opportunities
More than four in five surveyed (84%) say that their stakeholders are increasingly expecting their firms to be a force for good in terms of environmental and social sustainability. This was a considerable increase in proportion from last year’s survey (66%), adding to a growing body of evidence that Covid-19 has increased awareness of ESG-related issues.
Indeed, just because an ESG strategy or committee has been set up, it doesn’t ensure that the plans and efforts are sufficient enough to respond to macrotrends.
Discussions continue to take place around whether current approaches to ESG are sufficient, or whether claims and disclosures are merely greenwashing or purpose washing. One 2021 study, covering 4,600 investors, found that 90% of respondents said they find it hard to trust a business’s ESG claims at face value. There have since been several headlines concerning high ESG ratings for – or increased ESG investments in – sectors with a history of poor environmental performance, such as oil and gas and fast fashion.