High ambitions but low drive - only one in three companies around the world have implemented measures to reduce emissions - PwC Global ESG study

ESG champions focus on speed and transparency

The study shows a major shift in thinking about how transforming operations to meet ESG standards can ultimately make companies more resilient and competitive. For the Champions in the survey this has meant investing heavily and forgoing short-term profits to transform companies to be sustainable long-term. For example, 92% of Champions have measures in place to manage resource efficiency as compared to 65% of non champions. Similarly, 81% of champions have a circular business model compared to 45% in non champions.

Mark McKeever added: “ESG Champions share similar traits. They are typically bigger organisations with revenues greater than €3 billion. They are better at making plans, supporting them with concrete measures and following up on them. ESG Champions have detailed short and long-term roadmaps, covering most of their value chains, as well as oversight on human rights risks, and robust, product specific standards. More than 70% of their products and services are in line with ESG objectives.They have ESG targets and KPIs tied to corporate targets and these are broken down into operational functions, and subject to regular monitoring. 81% of Champions are significantly realigning their business models, for example, by moving towards circular business models or adjusting product portfolios to match ESG targets. By comparison, only 15% of other companies are doing this.” 

Champions are more digitally advanced, with higher levels of data transparency and accessibility. 81% of survey respondents say their ESG data is fully available and used for decision making, compared to just 13% of other companies that say the same. 

Mark McKeever continued: “It seems that ESG champions are also more resilient when faced with ESG challenges. On average, Champions are 25% less likely to cite challenges holding back implementation such as cost, access to data and unclear business impact. Champions are significantly less affected by issues of great concern to other companies such as insufficient top management support, a lack of ESG strategy and unclear responsibilities – for example, just 13% of Champions cited these challenges versus roughly a quarter of other companies. For Champions, their main concern is inadequate access to data. 

Emerging gap between Champions and others

The research reveals an emerging gap between those companies that are acting quickly to broadly implement ESG standards and those that aren’t. While some act quickly and implement ESG standards on a broad basis, those who merely agree on the minimum fall far behind. As Champions focus on areas like advanced tracking and collaboration with suppliers, they improve their entire value chains, making it harder to compete for companies that haven’t taken these measures.

Mark McKeever concluded: “While the ESG transformation may affect the competitiveness of companies in the short term due to rising costs, the advantages outweigh the disadvantages in the long term. These include more transparency in supply chains, lower energy costs, lower material costs, an innovative edge and, as a result, increased investor interest. It also has reputational and employee retention advantages. Companies that lag behind may soon not be able to catch up." 

Ends

About the survey: 

PwC surveyed over 900 c-suite executives, senior manager and sustainability leaders in 30 countries worldwide in late 2022. The companies were from nine key industries including Retail and Consumer Goods, Pharma and Med Tech. The objective was to understand how far companies have progressed with setting ESG targets and implementing strategies.