The COVID-19 pandemic has had a profound impact on businesses’ perceptions of ESG issues. Even before the pandemic, sustainability was rising up the corporate agenda, but this trend has accelerated dramatically during the crisis: improved ESG performance is now a core strategic objective for most organizations.

Crucially, the determination to embrace ESG principles is shared by all stakeholder groups, including investors, employees, customers and suppliers. And those organizations that are rising to the challenge are already reaping the rewards, securing clear financial and ESG-related benefits from these initiatives.

Nevertheless, this work is in its infancy and there are hurdles to overcome. Some companies are still struggling with the question of how to fund long-term investment in ESG, particularly in the wake of the crisis. Others are concerned about governance issues – how to report and monitor ESG performance, for example, and who should lead that work. And reaching a consensus on issues such as reporting standards will require collaboration between a broad range of actors.

The direction of travel is clear now that a business case for strategic investment in ESG has been established. Business leaders recognize that we have moved past the tipping point: ESG is now a key battleground in the competition for investment and talent – and, ultimately, to attract and retain customers.

ESG: Beyond the tipping point

Businesses worldwide are embracing ESG goals

COVID-19 has been a wake-up call

ESG has become more of a priority since the outbreak of the pandemic

Investors have become more demanding

Businesses expect rapid results from ESG investment

If the benefits are so clear cut, what is holding some businesses back?

Reporting is now essential – but it is still a challenge

The customer/shareholder balancing act is a problem

Conclusion