More than a third (38%) of businesses do not have an ESG strategy in place, according to a recent survey by GlobalData.

And that is not all – half of those surveyed believe most companies are just using ESG for marketing purposes.

The survey, which polled 360 respondents, dug into the reasons behind companies' ESG efforts (or lack thereof). Government regulations and pressure were seen as the biggest driver (38%), followed by a desire to boost profits (32%). Also, employee pressure came in last (4%), while customers held some sway (14%).

These findings align with the widespread feeling that ESG is mostly "greenwashing" (marketing hype). Over half the respondents felt this way. Nearly a third (32%) saw a mixed bag, with some companies being genuine and others using it for show. Only 8% believed most businesses were truly committed to ESG.

New Era of Scrutiny for ESG

Concerns about companies' real commitment to ESG are leading to more watchful eyes. A recent GlobalData report on "ESG 2.0" highlights this. It warns that companies need to be extra careful with their ESG messaging and strategies. Governments are cracking down, politicians are calling them out, and stakeholders are demanding action on ESG promises.

This focus on enforcing ESG commitments is seen as a major shift, a move from voluntary actions to mandatory ones.

ESG Concerns Take a Backseat (for Now)

Despite all this, only 9% of those surveyed see ESG as the biggest issue impacting their businesses in the next year. Inflation and geopolitical tensions ranked much higher.

However, the report warns that underestimating ESG could hurt companies in the long run. "ESG 2.0 won't be kind to those who fall short, especially on environmental issues," it says. Businesses that do not decarbonise face higher costs, lost sales, and being held accountable for their entire supply chain's ESG footprint, not just their own operations.

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Source: GlobalData