A new survey has revealed that a significant number of companies in the UK, US, and EU are hesitant to increase their investment in environmental, social, and governance (ESG) initiatives due to a lack of clear regulatory guidance. The poll, conducted by risk management firm Alcumus, found that 49% of over 600 surveyed companies are deterred from investing more in ESG.
The primary obstacles cited by respondents were a lack of technical understanding (77%) and insufficient guidance from regulators (73%). This regulatory ambiguity is creating a climate of uncertainty, making it difficult for businesses to confidently navigate the complex landscape of ESG reporting and investment.
Beyond regulatory challenges, companies also face internal hurdles. The survey identified difficulty in accessing data across organizations and their supply chains (43%), a shortage of necessary tools and technology (38%), and a general lack of resources (29%) as key factors hindering ESG efforts.
Despite these challenges, the survey paints a picture of growing corporate commitment to ESG. A notable 90% of companies now incorporate ESG considerations into their corporate strategy, with 67% investing in systems and technology to collect data and measure progress. This trend is even more pronounced among larger firms with 250 or more employees, where 94% have adopted ESG and 71% have invested in data-capturing systems.
David Picton, Senior Vice President of Sustainability at Alcumus, emphasized the critical role of data in credible ESG reporting. “ESG adoption is clearly now an irreversible global trend, but data will make all the difference to the credibility and authenticity of ESG reporting,” he stated. He added that companies recognize the need for meaningful ESG standards to attract customers, investors, and employees in the future.
Picton said that companies are using the post-pandemic environment as a catalyst to “build back better” and revisit their business models. While addressing ESG is a key part of this strategy, he stressed that having “data and evidence” is critical to demonstrate long-term impact and change.
