Economic Pressures Force Companies to Rethink ESG Priorities
The intersection of economic pressures and sustainability has been a topic of growing concern in recent years, with many companies struggling to balance short-term financial gains with long-term environmental and social goals
Google Cloud’s recent sustainability study shows that amid economic challenges, enterprises are de-emphasizing environment, social, and governance (ESG) initiatives in favor of short-term revenue-boosting activities. The second annual Google Cloud-sponsored survey questioned 1,476 top executives from 16 countries about their company's ESG investment priorities.
ESG investments, once a top priority for global enterprises in 2022, now rank third. The survey, conducted by The Harris Poll on behalf of Google Cloud, highlights that respondents struggle to execute their ESG goals due to economic pressures and the need to generate revenue.
Justin Keeble, managing director for global sustainability at Google Cloud, suggests that organizations must embrace accountability, effective measurement and management, and strong leadership to overcome these challenges. He warns against treating ESG initiatives as short-term costs rather than long-term investments.
Keeble cites consumer preferences as a crucial factor, noting that 85% of executives recognize that customers are more likely to engage with sustainable brands. However, 78% of respondents are forced to achieve sustainability results with less funding than before.
The 2023 survey echoes findings from the inaugural 2022 study, showing a desire to improve sustainability efforts but a lack of experience and knowledge in senior leadership. Keeble reports that 72% of respondents want to advance sustainability efforts but don’t know how, a 7% increase from the previous year.
The survey also highlights the need for clear accountability in company structures, with 84% of respondents believing their green efforts would be more effective with a better organizational framework. Keeble states that having a dedicated leader for sustainability initiatives and agile team structures would help 83% of companies achieve their goals.
Greenwashing remains a significant concern among respondents, with 59% admitting to exaggerating their company’s sustainability activities. Keeble emphasizes the importance of accurate measurement and ambitious targets, with 87% of respondents seeking better measurement systems to set more precise goals.
“Institutions, especially corporations, face demands for greater transparency and more robust standards and systems. As such, there is little patience for glib ESG goals, such as “greenwashing,” where companies give a false impression of their environmental impact or benefits,” Keeble said in an earlier blog.
Image credit: iStockphoto/useng
