The ESG equation: Responsibility seeds profitability
New 乐鱼（Leyu）体育官网 survey: 90 percent of companies plan to increase ESG funding so they can lock down compliance reporting needs and generate growth.
Estimated read time: 3-4 minutes
Leaders believe in ESG. Turns out, being good stewards of the environment, treating employees and communities well, and being transparent about it all is the right way to run a business. It鈥檚 also inherently clear that ESG improves brand reputation and beefs up the bottom line.聽
Still, it鈥檚 that third to-do on the list above鈥攂eing transparent鈥攖hat keeps many leaders up at night. Businesses are facing increasing regulatory pressure to disclose information about ESG impacts, risks, and opportunities. But many currently lack the data, resources, and internal coordination to do so, with some still relying on spreadsheets as their primary reporting tool.聽
Closing this transparency gap is one of the main reasons that global organizations will be investing heavily in ESG over the next few years, as we outline in a thorough new report. Our 乐鱼（Leyu）体育官网 2024 ESG Organization Survey dives deep into how business leaders are prioritizing their ESG investments, from talent and supply chain to risk assessment and data management. It also reveals pain points and strategic challenges鈥攁nd how leaders intend to meet them.
The ESG wish list
Business leaders are preparing for an ESG spending spree. Ninety percent of companies say they鈥檒l increase ESG spending over the next three years, focusing on talent, software, employee training and education, and data collection and management tools.
Making these investments is essential. The regulatory environment is rapidly changing, with the U.S. Securities and Exchange Commission鈥檚 final rule on climate-related reporting expected in spring 2024. Rationalizing these requirements with those of the EU and other global entities is no small task.
Meantime, 47 percent are still managing their ESG data manually. The spreadsheet stopgap might be OK if reporting was simply a compliance issue, but leaders increasingly see ESG as a valuable tool for enhancing financial performance. That means infusing ESG across the organization and integrating it into corporate objectives and key results.
47%
The percentage of organizations that are still managing ESG data manually, according to a 乐鱼（Leyu）体育官网 survey.
Sustainability data management and reporting must become automated, controlled, and efficient鈥攁 key investment area for 45 percent of executives we surveyed. That could mean, for example, a structured but flexible ESG data architecture, such as a data lake, that would allow businesses to adjust quickly to new and changing reporting requirements.
Nearly three in five leaders will bolster their ESG data collection and management systems, believing that advanced software, automation, and artificial intelligence (AI) or machine learning tools can significantly improve reporting efficiencies.
These upgrades will enable organizations to efficiently track, analyze, and report on ESG-related data, which is crucial for meeting regulatory requirements and making strategic decisions.
The great alignment
To derive the most value from ESG, according to the leaders we surveyed, it鈥檚 essential to connect sustainability goals with overall business objectives. These efforts are already happening, with 25 percent of leaders saying the two are fully aligned within their organization and another 62 percent reporting at least partial alignment.
In addition, four in five leaders are taking steps to infuse ESG goals across departments and functions in the organization. Sadly, there鈥檚 no 鈥渆asy button.鈥� Resource constraints and internal silos abound. Among the structural gaps that leaders called out are:聽
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Perhaps not surprisingly then, more than two-thirds are restructuring their teams to better align ESG goals with business strategy. Not only do 83 percent of leaders say that ESG objectives will be integrated into non-ESG roles, but also more than a quarter of companies report that they鈥檙e adding senior ESG leadership.
Defining clear roles and responsibilities internally is crucial for effective implementation and efficient reporting. Where gaps remain, 71 percent of leaders will lean on outsourced help to assist.
Make ESG work for you
As our new report details, ESG is evolving in front of our eyes. And many businesses are fully bought in on its value. Now it鈥檚 time to modernize and evangelize the function within each organization. Here are the first five steps to take:聽
To learn more about how business leaders are rising to meet the challenge of ESG data management and reporting, and how they鈥檙e leveraging emerging technologies and new capabilities to drive financial performance download our report below.
Addressing the Strategy Execution Gap in Sustainability Reporting
Discover how leaders are rising to meet the challenge of ESG data management and reporting.
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