7 RESILIENCE LEVERS

Once considered a box tick or supplementary PR exercise, today ESG permeates throughout every aspect of business

– from investor relations and marketing to regulation and compliance. In turn, ESG has rapidly climbed the corporate agenda, becoming a major consideration for any company’s leadership.

Our findings in 2021 show that ESG is increasingly impacting not just the ‘softer’ realms of business, but companies’ bottom lines too: more than 1 in 5 of those surveyed believe that ESG and sustainability developments have had a material adverse impact on their revenue over the past 12 months.

It is also clear that whereas previously ESG may have solely been considered a risk to be managed, the vast majority of businesses now perceive it as a strategic opportunity to be seized; 85% of those surveyed have shifted their approach from reactively managing ESG risk to proactively identifying new ESG-related commercial opportunities.

OF G20 COMPANIES BELIEVE THEIR DIVERSITY STRATEGY IS FALLING SHORT

1 in 5

G20 COMPANIES BELIEVE THAT ESG AND SUSTAINABILITY DEVELOPMENTS HAVE HAD A MATERIAL ADVERSE IMPACT ON THEIR REVENUE OVER THE PAST 12 MONTHS

Given the reputational, financial and regulatory risks (and opportunities) posed by ESG, the vast majority of G20 companies are, consequentially, escalating their ESG efforts too; our research shows that 83% of those surveyed have increased their commitment to ESG and sustainability over the last 12 months, whilst 83% have been spending more on ESG.

With this year’s UN Climate Change Conference of the Parties (COP26) on the horizon, there is a possibility of new legislation, and increased regulation, around sustainability and environmental practices in particular. As such, an inconsistent or uncoordinated approach to addressing climate change has this year become a key C-suite concern for over 1 in 4 G20 companies (28%).

REGULATION AND INVESTIGATIONS

Our research also found that 30% of companies across the G20 expect to be investigated by regulatory or government bodies in the next 12 months on their sustainability and ESG practices.

Potential sustainability regulation, coupled with the universal drive to increase ESG commitment, is in turn placing companies under increasing burden and scrutiny. Over a third of G20 companies say they are under extreme pressure to improve in the area of ESG, whilst only 13% believe their sustainability and ESG practices are meeting expectations in all areas.

Overall, our research paints a picture of the vast majority of companies investing more in ESG efforts, but being equally dissatisfied with their progress or impact to date. Concerns over regulatory investigation are also considerable, though the vast majority of companies see ESG as a positive opportunity for growth.

55%

OF CHINESE COMPANIES ARE CURRENTLY EXPERIENCING OR ARE EXPECTING SUSTAINABILITY OR ESG INVESTIGATIONS IN THE NEXT 12 MONTHS

Only

13%

OF G20 COMPANIES BELIEVE THEIR SUSTAINABILITY AND ESG PRACTICES ARE MEETING EXPECTATIONS IN ALL AREAS

INSIGHTS

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Why tackling the energy crisis calls for collective action

July 11, 2022 - Russia’s invasion of Ukraine has in a few short months altered our view of energy security forever. Governments, consumers and producers around the world are scrambling to adapt, while at the same time facing mounting pressure to drastically reduce the environmental impact of the energy we use and address a global supply chain crunch. Meeting the goals of security, sustainability and accessibility – the energy trilemma – is more difficult and more crucial than ever.

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The roadmap to a low cost, secure, low carbon future, or simply high level ambition?

APRIL 8, 2022 - Against the backdrop of global gas supply issues, the need to accelerate progress on net zero, soaring inflation and a cost of living crisis, the Energy Security Strategy is critical for Government to demonstrate delivery on its political agenda in the energy sector. However there are little in the way of quick wins, and a huge amount of work for the sector to meet these ambitious new targets.

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Europe Can Cease Its Reliance on Russian Gas Imports by the End of 2025

March 23, 2022 - In this white paper, we look at a set of measures that would enable Europe to cease (or reduce) its reliance on the Russian gas. Although it is impossible to achieve by the end of the 2022, by the end of 2025, Europe could cut most of the Russian gas imports by debottlenecking gas infrastructure, accelerating renewables deployment, increasing local and foreign gas supply from existing partners.

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The Case for Energy Transition is Stronger Than Ever

March 09, 2022 - As the world watches the troubling crisis unfold in Ukraine, the economic impacts of the conflict are becoming more clear. Several nations have levied strong sanctions against Russia impacting many sectors, and analysts say it could only be a matter of time before western allies impose sanctions on Russian energy exports, which could have major impact on the global economy.

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Emerging Danger – A New Net Zero Industry?

January 11, 2022 - The UK Government’s Net Zero Strategy could offer major opportunities to fraudsters, as demonstrated by the Government’s own figures on stimulus fraud during the pandemic. These suggest that, for example, £5.2bn (or 8.7%) of the £60bn paid out under the furlough scheme was lost to fraud and error. In addition, 11% of the £47bn of Bounce Back loans paid by banks related to fraud, resulting in a £4.9bn cost to the taxpayer. The total losses from stimulus fraud are likely to be much higher.

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Building Resilience - An Insurance and Asset Management Spotlight on ESG

October 25, 2021 - ESG is moving up the corporate agenda - but how are insurers and asset management companies responding? We share the key findings from our latest Resilience Barometer® here:

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Australian Companies Are Falling Short on ESG Reporting

Corporate Australia has become very fluent in discussing the key elements of environmental, social and governance issues, but companies around the world are doing more as they tackle climate change and the global economy moves away from fossil fuels. Australian directors are falling behind their global counterparts in the ESG space. 

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Take it away! Net-zero targets and the role of carbon removal

March 4, 2021—With a net-zero carbon neutrality target introduced for mid-century, the role of technologies that can capture, remove, and store carbon is now a mainstream debate – and has been confirmed as a valid mechanism for reaching the goal.

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The Mainstreaming of ESG Investing in the Decisive Decade for Climate: An FTI Consulting Report September 2021

September 1, 2021—Global institutional investors are doubling down on ESG as policymakers and regulators strengthen disclosure requirements according to new research from FTI Consulting.

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Looking to the Horizon – The Pitfalls on the Path to Net Zero

August 9, 2021—A ‘perfect storm’ is developing, bringing a wave of climate change-related disputes, super-charged by the £2Bn of cash held by the UK’s litigation funders.

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Sustainability in Insurance

August 6, 2021—In a roundtable with Risk & Compliance magazine, Graham Handy and Darko Popovic discuss the growing importance of sustainability for the insurance sector.

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Energy Transition: Acceleration of Generation Capacity in South Africa

August 6, 2021—As we move from 2020 into 2021, it has become clear that the Covid-19 pandemic and ongoing load-shedding continue to severely hinder the South African economy. In the meantime, energy transition is accelerating globally, spurring South Africa on to decarbonise its economy while supporting sustainable economic growth.

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A Test of Resilience: COVID-19 and the Business of Europe’s Green Deal

May 1, 2020—The impact of the global Covid-19 pandemic is clearly enormous in health, social and economic terms. It has also had an immediate environmental impact which may play out over the longer term, with a number of political repercussions.

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Fit-for-55, en route to Fit-for-100

July 16, 2021—Under the pressure of climate change and the urgency to act, the European Union has recently adopted the European Climate Law which enshrines into binding legislation the objective of climate neutrality by 2050 as well as an intermediate target of a 55% cut in emissions by 2030 compared to 1990 levels.

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The Decade of Disputes & the impact of litigation funding

July 22, 2021—As the “decade of disputes” continues, research by FTI Consulting has found that third-party litigation funding will support the rise of high-profile claims.

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Sustainable Aviation: Are the US and EU an Ocean Apart?

May 19, 2021—Leaders in Washington D.C., Brussels, and national capitals across Europe, are seeking to tie the economic recovery of air travel in a post-COVID world to more sustainable air travel and a greener, more resilient growth strategy. In Europe, the European Green Deal, introduced by the European Commission, has set a new standard for environmental and decarbonization policy, and some policymakers in Washington D.C. are looking to that proposal as a framework for the U.S.’s own sustainability strategy.

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ESG & Energy Transition in the Mining Sector

January 27, 2021—With the election of a more climate-focused administration in the United States and the European Union (EU) honing in on the mining industry to reduce their carbon emissions, the South African government and mining industry must work together to effect the transition to a lower-carbon future.

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Building Back Better? Real Estate in the wake of Covid-19 and the European Green Deal

November 3, 2020—With the sector grappling with the dramatic short-term consequences of the Covid-19 pandemic, EU policy-makers are now targeting massive investment in a ‘Renovation Wave’ as well as an ambitious legislative programme on buildings and construction, including on ESG and sustainability issues, that will immediately and directly impact the real estate industry. How prepared is it for the challenges and opportunities ahead?

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