2023 Predictions: How Will ESG Compliance Drive Investments?
The DRI International Future Vision Committee has released its 8th Annual Predictions Report, looking ahead to 2022 and its impact on the resilience community. Download the complete report free from the DRI Library, and read on for how corporate citizenship will impact companies.
Prediction 10: ESG compliance will become a major driver in future business investment decisions.
Environmental, social, and governance (ESG) is a measure of good corporate citizenship based upon the premise that companies performing poorly in these categories are more likely to endure materially-adverse events. Companies practicing ESG tend to have a higher degree of long-term planning, a wider focus on their stakeholders, and a greater sense of employee-shared purpose. This should lead to greater resilience and commitment across all stakeholders.
There are a number of reasons why ESG will get more attention from boards and C-suite executives. Increasing physical and scientific evidence will play a part, but the main drivers are sustainability reporting requirements and pressure from insurers or investment managers. However, ESG is becoming a political football in many parts of the U.S. Florida has banned pension funds from considering ESG standards in investment decisions and 19 other states are looking at adopting a similar policy.
Despite these conflicts, most corporations are looking at climate resilience and overall sustainability as key issues. This new emphasis is an opportunity for resilience professionals to move into a truly strategic role. Forward-thinking corporations are likely to appoint Chief Resilience Officers, following the model pioneered by the Rockefeller Foundation in the public sector. However, because ESG is a challenging and long-term endeavor, it will be interesting to see how important it remains to companies (and shareholders) in the longer term.
Join us for DRI2023 in Austin, TX, Feb. 26 – Mar. 1, 2023, where Future Vision Committee Chair Lyndon Bird will lead an interactive session where participants will have the opportunity to vote on a number of the key issues which have emerged from the reports. Bird will respond to voting as it happens, providing instant feedback and opinion. Please come to this session ready to participate, debate, and even argue if you wish. Challenging and controversial opinions are welcome.