In an increasingly global and interconnected world, businesses are no longer judged merely on their economic performance, but also on their engagement with and impact on society. Two key pillars of this evolving perspective are Environmental, Social, and Governance (ESG) criteria, and Diversity, Equality, and Inclusion (DE&I) initiatives. These represent the ethical and moral compass of an organisation, indicating its commitment towards creating a sustainable and equitable future. However, there often exists a disparity between the espoused values and the actual practices of businesses.
Let’s deep dive into these discrepancies that lie within the realms of ESG and DE&I in organisations.
Delve into the variances in perceptions on ESG and DE&I initiatives
Adoption of ESG strategies: According to our survey, there is a significant gap between the adoption of ESG strategies and targets among different levels of leadership. While 72% of Owner/CEO/MD respondents reported having an ESG strategy with key targets, only 30% of senior managers and 40% of all positions shared the same sentiment. This highlights the importance of having authentic and wholehearted support from the top to ensure the success of such initiatives.
Compliance vs. net zero targets: Interestingly, the most senior leaders appear to prioritise compliance with legislation, with 76% stating they follow their ESG strategy for this purpose. However, when it comes to meeting net zero targets, only 14% of Owner/CEO/MDs are motivated by them, compared to 21% of all positions. This suggests a need for a cultural shift towards more environmentally conscious decision-making, with senior leaders leading by example.
ESG assessment and organisational risk: The survey also reveals that a higher percentage of Owner/CEO/MDs (52%) stated that their organisations have undertaken an ESG assessment and understand their organisational risk, compared to just 21% of board directors. This indicates that senior leaders may have a better grasp of the potential risks and opportunities associated with ESG practices. It also emphasises the need for effective communication and collaboration within all levels of leadership to ensure a comprehensive understanding and approach towards ESG initiatives.
DE&I strategy and hiring practices: When it comes to DE&I strategies, 70% of Owner/CEO/MDs believe their organisations have a clear strategy, while only 53% of senior managers share the same perception. Additionally, 86% of the most senior leaders claim to have a hiring process that helps avoid unconscious bias, compared to 54% of senior managers. These findings suggest that there may be discrepancies in understanding and implementation of DE&I initiatives within organisations.
Wrapping up
The role of leadership in driving ESG and DE&I initiatives cannot be understated. Senior leaders set the example for attitudes and behaviours, influencing the entire organisation. Aligning the perceptions and actions of leaders across different levels is crucial for the success of these initiatives. By prioritising authentic support, understanding organisational risks, and fostering inclusive hiring practices, leaders can create a positive impact on company culture and drive meaningful change.
Further, you can download our 8th Annual Trends Report to gain a deeper understanding on the perceptions and actions of leaders on ESG and DE&I initiatives in organisations to create a more sustainable and equitable future for all.
Download the Annual Trends Report now!