The global cost of living crisis has not swayed Australians from thinking companies should be focusing on environmental, social and governance (ESG) issues, with the greatest importance placed on environmental action.
This is SEC Newgate’s second global ESG monitor that surveys people on their understanding and sentiments towards ESG. This year’s survey covers 12 countries and 12,000 respondents, 1,000 of which are based in Australia.
This year’s annual SEC Newgate Global ESG Monitor found that despite the impact of economic problems, Australians still expect business action on ESG issues. Some 80% said companies have a responsibility to behave like a good citizen and consider their impacts on the planet, while 73% think companies can be profitable while also performing well on ESG. Three in five Australians (61%) think companies should be penalised for lack of action on key ESG issues.
Despite cost of living soaring to the top of people’s list of concerns (47% said it was the nation’s top priority), interest in ESG issues has stayed fairly steady (6.1 out of 10, compared with 6.3 last year). However, evidence from European markets suggests that disruptions to energy, fuel and food supplies may become increasingly key issues in Australia over the next 6-12 months and it will be interesting to monitor how this develops.
Highlighting the ongoing ESG disconnect, nearly half of Australians (47%) distrust what companies say about their ESG performance – and only 8% trust them. In addition, they are seeking clearer reporting of ESG actions (73%) and a more consistent approach to company ESG reporting (71%).
Overall, Australian companies continue to receive middling ratings for their ESG performance. About 7 in 10 Australians agreed that companies could be doing more to look after their employees, take responsibility for the conduct and performance of supply chains, have processes in place to identify and stop unethical behaviours, and to support vulnerable or marginalised groups.
Around half (52%) of Australians cited unprompted environmental concerns as the most important ESG issue for companies to address, ahead of social (24%) and governance issues (11%). Generally, Australians also felt more strongly than people globally about environmental action.
The survey also found that we have more trust in smaller companies than large companies to “do the right thing” on ESG issues. When thinking about small companies the industries that are driving perceptions on ESG issues are manufacturing, online marketplaces and grocery stores, while the industries driving perceptions of large companies are energy, mining and banking.
Community activism on ESG issues is generally lower in Australia compared to other countries surveyed. The biggest issues that would prompt Australians to boycott a company are slave or child labour, corruption and animal testing or cruelty.
A large minority (41%) said they would be prepared to contribute something towards the cost of better ESG performance by corporates despite two thirds believing corporates shouldn’t pass through their ESG costs to consumers. However, only a third of retail shareholders (37%) are prepared to receive a lower return on investment in companies with stronger ESG performance, with many in SEC Newgate’s qualitative research expecting companies with stronger ESG credentials to yield better ROI.
For large corporates, the factors likely to have the most impact on perceptions of ESG performance relate to governance – ensuring that the whole organisation is aligned and genuine in the way it operates over the long-term. It comes down to behaving ethically and doing the right thing, being honest about environmental impacts, ensuring ethical operations in the supply chain and, to a lesser degree, paying their fair share of tax. Responsible and sustainable use of natural resources is also a key driver.
While some of these governance and environmental issues are also key drivers of perceptions for smaller companies, here there is more benefit in demonstrating how they are actively trying to minimise environmental impact, support causes and communities in need and work towards being carbon neutral.
Interested in the findings? Download the Australian report.
You can also view the global report and other country findings here.
Want to know more? We’d be happy to present to your team and share some of the insights from our recent qualitative research in this space and key implications for corporates looking to leverage actions in this area to boost their reputation. Contact us to register your interest.
SEC Newgate’s Environmental, Social and Governance (ESG) advisory services provide a one-stop-shop to help you deepen your understanding of stakeholder expectations, prioritise and develop your response, then successfully implement it. Read more to see how our offering can help you.
Contact us for more information about the full research report.
Sue Vercoe, Managing Director, SEC Newgate Research – [email protected]
Irene Diseris, Director, SEC Newgate Research – [email protected]
Angus Trigg, Partner, SEC Newgate / ESG – [email protected]
SEC Newgate’s integrated approach draws on our national team’s experience and networks to deliver a full service offering.
