Hello to a new year, a fresh start and forward focus. We aren’t the only ones looking forward and appraising the year ahead; a new report has noted that in 2021, Chief Financial Officers (CFOs) are placing a high priority on ESG (environmental, social, and governance) issues and assessing how organisational ESG activities and investments compare with evolving stakeholder expectations and business values.
It seems an increasing number of companies are seeing the value that attention to ESG matters can bring in terms of relative performance and investing in initiatives they care about. The pandemic has certainly highlighted ESG issues and it seems more organisations are embedding them as an integral part of business planning.
The US report1 outlines, ‘Many companies recognise that investing in ESG is the right thing to do, but the real incentive comes from evolving stakeholder expectations… In 2021, customers, employees, suppliers, investors and the communities in which companies operate are likely to place even greater pressure on companies through their consumption choices, preferences regarding the organizations they want to work for and with, and calls for greater transparency on ESG… Finance leaders should expect to invest more time scrutinizing and strengthening ESG metrics and reporting to sustain relevance with institutional investors, asset managers and other investors. They also need to enhance the rigor of the disclosure controls and procedures that generate ESG reports.’
As the global landscape evolves, ESG is certainly firmly on many businesses’ agendas this year, as they shift towards a vision of matching profit, coupled with the pursuit of sustainability and societal impact.
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.