Global professional services firm PwC announced the release of its annual Corporate Directors Survey, indicating that ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. More issues are becoming top of mind for corporate boards, yet revealing that a lack of understanding of these factors may be a barrier to overseeing sustainability issues and implementing effective ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. More strategies. PwC surveyed over 850 public company board directors for the study from a broad range of industries and various company sizes.
The survey revealed that boards are increasingly cognizant of ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. More issues, with 52% of respondents reporting that ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. More is regularly on their boards’ agenda, up from 45% last year, and only 34% in 2019. The increased attention to sustainability issues appears to be making its way into company strategy, with almost two thirds of directors saying that strategy is now tied to ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. More issues, up from 49% last year.
The trend of increased ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. More awareness and integration was particularly strong among large companies, with 62% reporting that ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. More is frequently on the board agenda (38% last year), and 74% linking ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. More to strategy (vs 54%).
The growing attention to ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. More comes as shareholders appear to be increasingly engaged on these issues. According to the survey, ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. More issues are increasingly dominating directors’ discussions with shareholders, rising to the number 1 topic for direct communication with shareholders, above other issues such as executive compensation or strategy oversight. Similarly, directors appear increasingly aware of the impact of ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. More on company performance, with 54% agreeing that ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. More can have a financial impact on performance, compared to only 38% last year.
Despite the increased awareness of the connection between ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. More, strategy and financial performance, the survey revealed some of the key challenges that may impact ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. More oversights and integration. Many directors do not believe they have a strong grasp of ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. More risk, with only 25% responding that their boards “very much” understand material ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. More risks. Similarly, only 28% reported that their board has a strong understanding of the company’s ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. More/sustainability messaging.
ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. More disclosure will likely take center stage in board discussions going forward, as more jurisdictions around the world look to implement mandatory reporting on issues such as climate, while the survey revealed that only 18% of directors are in favor of mandatory ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. More disclosure.
One of the key issues studied in the survey was the directors’ views on board diversity. The survey found that while some progress has been made on gender diversity, with female representation on boards rising to 28% from only 16% ten years ago, racial diversity has hardly budged, as only 5% of directors are Black and 3% Latinx, according to the report. Attitudes towards diversity appear to be shifting, with over half of respondents supporting tying compensation to diversity and inclusion goals (up from 39% last year), and only a third of directors saying that no measures are necessary in order to foster greater diversity, a sharp drop from 71% last year.
Maria Moats, leader of PwC’s GovernanceGovernance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights. More Insights Center, said:
“Regardless of the motivations behind it, directors are supportive of many methods for achieving diversity. But in order for new board members to provide the most value, deliberate inclusion efforts must be made. Each voice in the boardroom needs to be heard. And boards that are prioritizing an inclusive board culture will be better poised to face whatever comes next.”
Click here to access PwC’s 2021 Annual Corporate Directors Survey.
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