Thursday 8 July 2021 6:00 am

Business leaders double down on hitting ESG targets

British business leaders are strongly committing to hitting their ESG targets, new research published today shows.

Figures compiled by Accenture, the global professional services firms, show 88 per cent of UK business leaders would not go back on their environmental, social and government commitments to meet earnings targets.

Read more: Sunak reveals new climate impact disclosure rules

Priorities in boardrooms are changing, with 84 per cent of leaders thinking it is important their firms pivot management toward creating value for stakeholders and not just shareholders.

Companies are likely to generate strong support from investors by pursuing an ESG agenda, with 87 per cent of businesses thinking their shareholders would support them if put this ahead of achieving earnings growth.

Simon Eaves, CEO of Accenture UK & Ireland, says: “After a year marked by major societal shifts on issues such as racism, the social divide and healthcare, we are seeing corporations shift their focus to building sustainability and purpose into the core fabric of their operations.”

“Most have made commitments, but there continues to be a gap between intentions and results – a purpose paradox.  There is a clear imperative for business to act on these societal changes now and deliver value to all of their stakeholders.”

Read more: COP26: ESG needs a top-down approach to be truly effective

Renumeration to be linked to ESG performance

Senior staff could lose out if they fail to deliver on improving their firm’s ESG credentials.

The research shows a majority of businesses are now linking renumeration to ESG performance.

Accenture warned that businesses are facing strong headwinds that could prevent them from achieving stakeholder value.

Deep rooted corporate culture solely motivated by profits, finding it difficult to balance the interests of all stakeholders and struggling to measure performance were identified as major hurdles.

Companies must change the way they measure success by focusing on how stakeholders are being impacted by their decisions, Accenture stressed. The firm urged businesses to create internal controls to strengthen accountability in order to achieve ESG promises.

Read more: Brexit: UK and EU still no closer to financial services deal

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