US survey finds majority of investors prize ESG credentials

A survey has found 70% of respondents believe organisations have a responsibility to demonstrate environmental, social and governance (ESG) performance to investors.

The survey – conducted by software business Workiva – surveyed opinion among individual investors in the US, France, Germany and the UK on the topic of ESG. It found transparency around ESG disclosures is becoming ever more integral to investor decisions, with companies undoubtedly due to face more pressure from investors on ESG progress.

Among Gen Z and Millennial respondents, 84% were aware of ESG while 64% claimed to know a lot about it. Awareness around the reporting was most common in Germany, with 93% of investors under 34 years old knowing of the investment topic.

Over half (65%) of the younger cohorts in the US stated ESG in companies has become more important over the last year, while 69% of respondents stated it will continue to grow in importance due to climate change. Furthermore, 72% of 18–34-year-olds in the US wanted to know whether a company lives up to their social and moral beliefs before they invest.

Many respondents were found to be sceptical of whether data about what companies’ were doing for the environment and society was trustworthy, with only 15% of those surveyed disagreeing. It was also found that 60% of the surveyed investors find it difficult to judge whether companies are doing the right thing when it comes to society and the environment.

Data was also identified as a key point of interest, with 43% of all respondents in all markets noting they trusted ESG performance when reporting through data and numbers. This number hiked to 54% for the younger investors. In other similar findings, 72% of individual investors believed that companies should make it more simple for them to judge ESG efforts through data.

Over half of all individual investors stated they would be more likely to invest in a business that demonstrates its ESG performance, increasing to 60% across all regions for Gen Z’s and Millennials.

Workiva COO Julie Iskow said, “Our survey findings represent a powerful motivation for organizations to take a serious look at how they are reporting ESG and other non-financial data. “We believe there is a real competitive advantage in attracting today’s modern investors with a commitment to corporate transparency.

“The survey indicates that investors want to see earnings growth, deeper data transparency and progress in all areas of ESG. This will require a technology solution that can deliver accuracy and simplify the complex process of collecting and reporting non-financial data; Workiva is revolutionizing how companies approach ESG reporting with a solution that does just that.”

Elsewhere in the ESG space, Deutsche Bank recently revealed it was establishing an ESG Centre of Excellence in Singapore.

According to Deutsche, the centre will work across all business divisions and focus on the execution of ESG transactions, new product development and advisory services. The latter will include sharing best global practices with Asian regulators and regional bodies.

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