ESG 'helps business leaders make better decisions', survey finds

09 Jun 2023

A survey conducted by the Institute of Directors (IoD) has revealed that around half of business leaders believe considering environmental, social and corporate governance (ESG) factors helps them to make better decisions for their firm.

42% of business leaders polled said that all three aspects of ESG were of equal importance. 26% highlighted 'governance' as the most important component, whilst 17% chose 'environment' as the most important factor and 9% selected 'social'.

Dr Roger Barker, Director of Policy at the IoD, said: 'Many business leaders see the value of incorporating ESG-type factors into their decision-making processes. However, the rapid proliferation of the ESG industry – in terms of things like ESG ratings and reporting standards – has also given rise to some scepticism and confusion.

'Our members highlight a legitimate concern: by subsuming governance into the broader concept of ESG, the unique role of corporate governance in driving corporate success may be neglected. A solid governance framework is a pre-requisite for success in the other aspects of ESG.'