Top-down ESG implementation worldwide- statistics & facts

Environmental, social, and governance (ESG) policies show that a territory, country, or specific organization is willing to commit efforts and resources to goals outside of traditional objectives such as cutting costs. ESG policies typically set a final objective along with the standards and processes needed to get there. In many regions across the world, a top-down strategy has been successful in causing a change. In Asia Pacific, roughly 60 percent of SMEs see the local government as their primary source of ESG advice and guidance. Many governments have joined the global UN initiative or are currently in the process of developing a national commitment. This top-down process means policy decisions at a national level are passed down to smaller entities such as businesses and smaller federal bodies. In many cases, this provokes individual entities to develop their own internal initiatives and, in turn, raises awareness of the importance of ESG among stakeholders and investors worldwide. As information about ESG becomes more widespread, local economies work to introduce regulations and structures that can be followed on multiple levels.

ESG in organizations

As information about ESG spreads, local companies begin to realize both the importance of their action and the benefits participation can bring them. The majority of firms worldwide are optimistic about the impact they can have on reducing ESG issues directly linked to their operations, such as water usage. Many firms acknowledge the direct benefits they may receive for their participation in ESG, aside from knowing it is the ethical thing to do. In the Middle East and North Africa region, the top benefit listed was increased brand reputation, while compliance with government policy ranked second, underlining the top-down communication approach. Despite commitment from various levels, some challenges continue to persist. Lack of knowledge, structure, and increased overall costs, ESG initiatives can often take resources away from other company goals. Firms may at times be required to reduce the priority given to ESG, allocating resources to further core business activities.

ESG among investors

As government bodies and local businesses further their ESG initiatives, impactful investing begins to rise. Investors make decisions based on both long-term profitability and achieving ESG goals. Information sharing plays a vital role in the future of ESG investing. A lack of trustworthy information being passed down from firms and governments to investors may act as a barrier to ESG. However, information can also act as a driver towards investment. As Individuals with more knowledge and confidence in this relatively new initiative are more likely to increase or retain holdings related to ESG.
This text provides general information. Statista assumes no liability for the information given being complete or correct. Due to varying update cycles, statistics can display more up-to-date data than referenced in the text.
Published by Statista Research Department, Dec 18, 2023

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