Sustainability – Thematic Research

Sustainability used to be just about saving the planet. Today it has morphed into an umbrella term for environmental, social, and governance (ESG) issues. While some companies are making concerted efforts to improve their ESG performance across many areas, others are simply paying lip service to the concept of sustainable profits. Momentum is on the side of the sustainability movement. Citizens, governments, regulators, and the media are turning the spotlight on corporations and demanding action. Social inequality, corruption, tax avoidance, and a lack of action on climate change are all issues that companies must now address head-on, in full public view.

The reluctance of many CEOs to fully engage with sustainability can be attributed to the age-old view that it will hurt profits. However, the evidence in this report suggests the opposite. Companies that embrace all three elements of sustainability will outperform their peers. CEOs that are too slow to improve their company’s approach to sustainability will see an exodus of customers and a drop in profits far sooner than they ever imagined.

Sustainability is a complex and wide-ranging subject and is often approached in a piecemeal, reactive manner. There are no global standards for sustainability, so it can be difficult for CEOs to know where to start. In this report, we set out a comprehensive sustainability framework – based on environmental, social and governance issues – to help CEOs identify all potential sustainability risks and implement mitigating actions that can improve their company’s ESG performance. Because no company can do this in isolation, we highlight some of the leading ESG rating agencies and ESG consultancies that can help CEOs measure and improve their ESG performance.

Scope

This report provides an overview of sustainability, the most important theme for 2020.

This report includes a comprehensive sustainability framework, covering environment, social and governance (ESG) factors, which can be used as a management tool to help CEOs identify all potential sustainability risks and implement mitigating actions that can improve their company’s ESG performance.

It highlights some of the leading ESG rating agencies and ESG consultancies that can help CEOs measure and improve their ESG performance.

Additionally, we highlight how some of the world’s largest companies across every major industry vertical including healthcare, TMT, retail and financial services are rated on ESG performance by four leading ESG rating agencies.

Key Highlights

While some companies are making concerted efforts to improve their ESG performance across many areas, others are simply paying lip service to the concept of sustainable profits.

Citizens, governments, regulators, and the media are turning the spotlight on corporations and demanding action. Social inequality, corruption, tax avoidance, and a lack of action on climate change are all issues that companies must now address head-on, in full public view.

The financial crisis of 2007 cast a shadow over the free market doctrine that had previously governed the corporate world. The public began to question profiteering by big business and put pressure on regulators to tighten controls. At the same time, the consequences of climate change have become more apparent, leading many to demand companies are more transparent about their environmental impact.

As ‘Generating Hashtag’ rises through the ranks of the global workforce, they will approach business decisions with a more sustainable mindset. As consumers, they will be attracted to more sustainable products.

Reasons to buy

In 2020, sustainability will be the most important theme discussed in corporate boardrooms worldwide.

Over the coming decade, it will transform the way that business is conducted. Customers, voters, and politicians will demand greater action is taken on environmental, social, and governance issues.

CEOs and upper management should utilize the ESG framework in this report to identify the impact of ESG issues on their business and the actions they should take to mitigate this.

Companies that take sustainability seriously now will be better placed to succeed in the future.

Companies mentioned

CSRHub

RobecoSAM

MSCI

Arabesque S-Ray

Sustainalytics

PwC

McKinsey

EY

KPMG

Deloitte

Bain

Trucost

CDP

Schroders

Mercer

Table of Contents

Sustainability is the most important theme for 2020

Globaldata’s sustainability framework

Sustainability measurement and response

Timeline

Companies

Glossary

Further reading

Appendix: Our thematic research methodology

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