ESG

Despite recessionary pressures and the underperformance of some ESG-focused funds, CEOs and investors are still working to balance company performance and ESG commitments (Figure 13). In fact, 15% of CEOs are prioritizing investment in ESG over business performance, and more than 60% of CEOs and investors indicate a commitment to both priorities heading into 2023. This percentage is even higher in Asia and Europe, where CEOs are more likely to balance ESG and business needs, while CEOs in the Americas lean toward refocusing on operations.

Question: Looking ahead to a possible recession, how will your company / should leading corporations be prioritizing investment in ESG-related activities, relative to the core business?

Despite the ongoing commitment to ESG-related activities, many large-company CEOs (nearly one in five) feel unprepared to handle the next controversial social issue (Figure 14). This lack of confidence also emerges in Figures 9 and 10 as CEOs cite addressing societal disruption as a major consideration. Meanwhile, mid-sized company CEOs are very confident in their ability to respond, which sits well with investors who believe that CEOs are generally well-prepared to respond when the next crisis erupts.

Question: How well prepared do you feel you are / leading corporations are to respond to the next controversial social issue that emerges for your company?

When the next crisis does arise, both CEOs and investors agree that addressing the issue with employees and customers first (before investors or the public) is the best course of action when building their social issue management strategy (Figure 15).

Question: When controversial social issues arise, how do you / should leading corporations prioritize your stakeholders in deciding how to react?