Companies Lack Expertise to Meet ESG Goals, Says FTI Consulting… | Your money


86% of companies surveyed said they had spent more resources on ESG and sustainability in the past 12 months

66% of companies are concerned that they do not have sufficient expertise to deal with increased scrutiny of ESG issues

31% of companies surveyed are or expect to be surveyed on ESG and sustainability practices in the next 12 months

WASHINGTON, Jan. 31, 2022 (GLOBE NEWSWIRE) — Despite increasing environmental, social and governance (“ESG”) and sustainability-related spending, two-thirds of companies are still unprepared and lack the resources to face intense scrutiny, potentially putting them at additional risk, according to new research from FTI Consulting, Inc. (NYSE:FCN).

According to January 2022 ®, a survey of senior executives from more than 3,300 large companies in G-20 countries, 86% of respondents said they had spent more on ESG and sustainability efforts in the past 12 months. However, 66% said they did not have sufficient expertise to handle increased scrutiny from a wide range of stakeholders, including regulators, customers, employees, local communities and shareholders.

These concerns, coupled with the fact that nearly a third of respondents are or expect to be the subject of ESG-focused surveys in the next 12 months, create a significant risk that companies need to mitigate to promote sustainable growth.

“The message is clear: ESG is a strategic imperative that is linked to greater value creation and business resilience,” said Caroline Das Monfrais, Global Resilience Lead at FTI Consulting. “As we see a growing shift in focus towards ESG and sustainability, G-20 companies have rightly increased their spending on their ESG programs. However, it is unclear whether these investments have been effective, as business leaders are still not confident in their expertise and continue to feel ill-prepared for the scrutiny and associated risks in this area.

More than a third (36%) of business leaders said they are under extreme pressure to improve ESG and sustainability efforts in 2022. Additionally, 38% of respondents feel they fall short in financial and ESG reporting transparency.

Supply chains are one of the biggest exposure points for companies failing to comply with ESG compliance – 35% of risk managers and 32% of legal managers said their companies had no succeeded in establishing sustainable supply chains. Amid growing stakeholder and regulatory scrutiny, how companies best address supply chain issues – and broader ESG compliance – will become a top concern over the next 12 months.

In response to the expectation to improve ESG-related programs and disclosure, business leaders are recognizing the need to engage their stakeholders in ongoing discussions about their ESG and sustainability approaches. Eighty-nine percent of survey respondents agreed that companies should be run in the interests of all stakeholders, not just shareholders.

Although the focus is on ESG risk management, there is also a business opportunity for companies. Eighty-eight percent of respondents said they were changing their approach to ESG, moving from risk management to identifying new business opportunities, demonstrating that appropriate investment to address broad and emerging markets can lead to sustainable growth.

“G-20 business leaders continue to focus on ESG issues and understand that business opportunity and social responsibility are increasingly intertwined,” said Kerstin Duhme, Senior Managing Director within the Strategic Communications segment at FTI Consulting. “A transition from reactive firefighting to new possibilities is clearly underway. To succeed in this transition, leaders must understand where strategic investments can have the most impact and create agile governance frameworks.”

Methodology FTI Consulting’s January 2022 Resilience Barometer ® incorporates insights from 3,314 decision makers (senior executives, board members, or C-suite) from leading companies across all G-20 countries and 11 sectors (latest edition: 2,869 decision-makers). Large companies are defined as those with more than 250 employees, or more than US$50 million in annual worldwide revenue, or with a balance sheet of more than US$43 million.

From October 26 to November 10, 2021, FTI Consulting conducted a quantitative survey with respondent profiles mirroring those of previous iterations of the Resilience Barometer® research. The results of this survey were supplemented with qualitative insights from industry and domain experts collected during a consultation conducted between December 2021 and January 2022.

Respondents reported an average global revenue of US$12.7 billion (latest edition: US$13 billion) over the past 12 months. Companies reporting global revenue of more than US$100 billion accounted for 6% of all respondents (latest edition: 5%). In total, participating companies employed a total of 60.9 million people (latest edition: 58 million people), with each company employing an average of 18,400 people (latest edition: 20,342).

For more information, visit https://ftiresiliencebarometer.com/

About FTI Consulting FTI Consulting, Inc. is a global business consulting firm dedicated to helping organizations manage change, mitigate risk and resolve disputes: financial, legal, operational, policy and regulatory, reputational and transactional. With more than 6,600 employees in 29 countries, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges and make the most of opportunities. The company generated $2.46 billion in revenue in fiscal year 2020. In some jurisdictions, FTI Consulting services are provided through separate legal entities that are separately capitalized and independently managed. For more information, visit www.fticonsulting.com and join us on Twitter (@FTIConsulting), Facebook and LinkedIn.

FTI Consulting, Inc. 555 12th Street NW Washington, DC 20004 +1.202.312.9100

Investor Contact: Mollie Hawkes +1.617.747.1791 [email protected]

Media Contact: Matthew Bashalany +1.617.897.1545 [email protected]

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