SEC Newgate Research’s first-ever global study of public attitudes to ESG (Environment, Social and Governance) performance has found Australians want greater accountability and transparency for both governments and companies. There is an appetite for more scrutiny of the accuracy of claims about ESG performance and tougher penalties for those who perform poorly or make misleading claims. Issues such as supply chain responsibility have emerged as key public concerns.
The findings also suggest Australians are increasingly making purchasing decisions taking into account ESG performance and using social media to criticise poor performers. This will be of interest to corporates and government alike as public expectations of what governments and companies should focus on are often markedly different.
Modelling also pinpoints the specific factors that most strongly influence ESG performance. Read on for highlights from the report.
Environment, and particularly climate, is easily Australians’ top ESG concern. Asked to nominate the one issue governments and companies should be focusing on, some 48% of Australians mentioned something related to the environment with 29% specifically mentioning climate.
A large majority of Australians had fairly strong views that companies should take responsibility for their supply chains (81%), and that they need to do more to look after their employees (75%). Among other findings:
Nearly half (44%) rated the importance of ESG performance in influencing their day-to-day purchasing decisions as 7 or more out of 10, where 0 meant ‘not at all important’ and 10 meant ‘extremely important’. Similarly, 45% said they had avoided using a product or service because they didn’t like the company’s practices. Some 36% had stopped following a person or company on social media in the last two years because they behaved in a way they didn’t like or agree with, while 33% had warned others against using a company because of their behaviour.
Government was rated lower than corporates, individuals and not for profits for ESG performance. Interestingly, Australians gave significantly lower ratings of government and companies than other countries. Not for profit organisations received the highest ratings for ESG performance followed by individual people and then companies.
Modelling by industry performance reveals that the banking and finance, manufacturing and the cosmetics and personal care industries have the strongest influence on perceptions of the overall ESG performance of companies in Australia. Highest rated industries for ESG were healthcare, education/training and technology. Lowest rated were mining and chemicals. Large retailers like Coles and Woolworths are seen as doing well on the ESG front and were likely given credit for recent well-advertised announcements about reducing their carbon impact.
Modelling shows weak government ESG performance ratings are being driven by perceptions around their policy leadership. The key areas having the most impact are government’s goals and ambitions for improving the environment, acting in the best interests of the global community and taking responsibility when things go wrong. On environmental performance, government was seen as doing best on encouraging renewables and poorest on climate change action.
Modelling clearly indicates that companies will enjoy greater cut-through and public reputation for ESG if they focus on concrete action on issues they can directly control – such as their own supply chain – as opposed to making wider values statements about public policy. Our research shows that overall ESG ratings for companies are primarily driven by responsible use of natural resources and reporting in a transparent manner. On specific performance measures, companies generally scored best for ensuring accessible access to products and services people require, strong risk management and promotion of workforce equality and diversity.
To Download: SEC Newgate ESG Monitor – Australia Report 2021
To Download: Global ESG Report
Related services: Environmental, Social & Governance Advisory (ESG)