The company responds to environmental challenges

The high volatility and the recent economic challenges, marked by high inflation rates, the increase in interest rates or the problems in the supply chains, do not succeed in diminishing the importance of the greater awareness of companies regarding their impact on the planet and in society.

Thomas Osborne
Thomas Osborne
15 October 2022 Saturday 18:32
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The company responds to environmental challenges

The high volatility and the recent economic challenges, marked by high inflation rates, the increase in interest rates or the problems in the supply chains, do not succeed in diminishing the importance of the greater awareness of companies regarding their impact on the planet and in society. Among their objectives, they focus their attention on achieving net zero emissions: proof of this is that 89% of managers have defined or plan to define transition plans that allow them to achieve climate neutrality. This is stated by the majority of the companies surveyed in the latest Business Pulse survey, the panel of companies promoted by KPMG and La Vanguardia, which represents more than 26% of GDP in Catalonia.

In this way, ESG issues continue to be a fundamental element in the strategic agenda of corporations for the creation of value in the long term and the search for new opportunities. In fact, 100% of the companies surveyed have already defined or plan to define a sustainability strategy with specific objectives and indicators.

In their ESG strategies, companies prioritize addressing climate change and taking action to achieve emissions neutrality first (89%). Although the social part also carries a relevant weight, with 75% of those surveyed who are committed to promoting talent and issues related to diversity, equity and inclusion; and 68% that take measures to comply with human rights and ethics in the organization's operations as a whole.

Another relevant aspect in the framework of the sustainability strategy has to do with the adaptation of products and services. Thus, 43% of the directors belonging to the panel place among the priorities of the ESG roadmap the use of opportunities around the circular economy and innovation in its business model.

This firm commitment to the acronym ESG in corporate strategies responds to the conviction itself and the opportunity that sustainable transformation brings, but also to meeting the expectations of stakeholders. Increased scrutiny from regulators, stakeholders and society as a whole is the main reason for moving forward on sustainability, according to 93% of those surveyed. It is followed at a certain distance by the improvement of the image and reputation of the brand (43%) and the detection of new business opportunities (36%).

This greater involvement on the part of interest groups has been especially reflected in the field of investors and financiers: 71% of those surveyed consider that the attention of this first group to ESG is "very high", followed by 68% in the case of funders. However, managers perceive that this greater interest in sustainability is not yet a priority factor for clients, although it is relevant: 54% consider that the interest is "moderate".

Bearing in mind that advancing in sustainable transformation is no longer an option for companies, all directors plan to increase their investment in ESG actions, projects or plans. Despite the fact that the uncertainty and complexity of the environment make it necessary to provide a balance between the short and medium term, most managers recognize that investment in the coming year will be moderate, compared to 46% who will do so significantly.

The scope and relevance of sustainable transformation undoubtedly entails challenges for organizations: according to 82% of the directors of companies, headquartered or operating in Catalonia, the most relevant challenge is the integration of ESG throughout the entire the value chain. In second place is the definition and execution of a long-term roadmap (indicated by 50% of those surveyed), and complying with the growing regulations in this area (36%).

The companies are aware of the importance of responding accurately and transparently to the growing demands of all stakeholders, and of the opportunities that this sustainable transformation will bring. However, there is still a long way to go: 57% of those surveyed acknowledge that they still need to improve in certain aspects to meet current demands, compared to 43% who say they are prepared.

In short, there is no doubt that growth amid so much uncertainty will only be possible from a clear and integrated sustainable strategy, which pivots on a series of specific objectives and indicators and thus allows us to move towards the true value of sustainable transformation. A change that manages to reflect a real impact on the planet thanks to the most ethical and responsible activity of corporations.