The JUST Report: After COP, Companies Need to Prioritize Building ESG Trust

Jay Owen SRI/ESG News, Beyond GDP

(Spencer Platt/Getty Images)

With COP26 wrapping up and the $1 trillion bipartisan infrastructure bill becoming law, two things are clear: The stakeholder lens for corporate risk and value creation is vital to addressing climate and other systemic societal challenges; and whether companies can get the job done is now the core question.

The latest Edelman Trust Barometer investor report* reflects this. The survey of 700 institutional investors found “86% of U.S. investors believe that companies frequently overstate or exaggerate their ESG progress when disclosing results, and 72% of investors globally don’t believe companies will achieve their ESG or DEI commitments.” Quite remarkable. At the same time, vast majorities still want to see these commitments, including 94% of the American investors surveyed expecting companies to have net-zero plans.

These findings complement our own annual Americans’ Views on Business Survey, which found an increase in those who believe business is headed in the wrong direction, while still desiring stronger action across ESG initiatives.

PwC, whose U.S. chair and senior partner, Tim Ryan, spoke to JUST this week, has partnered with Edelman on the Trust Leadership Institute. Their first session launched last week. Tim cited his firm’s own recent survey and said part of the problem is that CEOs have not recognized the demand from employees for accountability. Corporate leaders must double down on transparency, he said, complementing ESG commitments with clear milestones and progress updates.

“I’m encouraged by what I’ll say is the humility of the C-suite,” Ryan told us about recent discussions he’s had, “of I’m trying to learn, and, frankly, keep up with the changing expectations.”

Markets depend on information, transparency, trust, and confidence in order to work properly. The ESG, impact, and stakeholder markets are no different.