VISION by Protiviti, Protiviti’s future-focused content platform, recently launched a deep dive into the future of ESG — the environmental, social and governance mandates and initiatives undertaken by companies worldwide, driven by the investor community, consumers, employees, shareholders and, increasingly, regulators. The ESG movement is seeking to ensure that companies across the globe operate in a responsible and sustainable manner that does not cause harm to the planet and people and protects value for investors and stakeholders.
The ESG picture globally varies widely from region to region and even country to country, shaped by the specific regulatory environment, politics, attitudes and economic development of the country or region. To understand better what that picture looks like, I interviewed Lyndsey Anderson, the Global Head of Research and Insight at The Economist Intelligence Unit (EIU), the research arm of The Economist Group. The EIU offers insight and analysis of global economic and political developments and identifies opportunities, trends and risks on a global scale, including those related to ESG. I asked Anderson to unpack for us the EIU’s latest ESG Rating Service report, which measures the environmental, social and governance scores of 150 countries. Here are some highlights:
- The environment remains the most relevant aspect of ESG analysis, due to the increasingly visible impact of climate change and environmental degradation. There is an urgent need for action — which starts with understanding where each country stands and what actions would be most impactful in addressing this global challenge.
- The social and governance aspects of ESG globally are getting challenged by countries where democratic institutions and social justice issues are not viewed as particularly important. Countries such as China, for example, are using their economic prosperity to tout the superiority of their governance model regardless of their low S and G marks.
- Perhaps not surprisingly, Europe outperforms other regions in all three aspects of ESG readiness, particularly the environmental one. This is driven by effective common regulations and policies for clean energy, water quality, deforestation and the like, as well as standards against corruption, civil rights abuses, labor conditions and so forth. Perhaps surprisingly, North America lags not only behind Europe but also several emerging economies in its environmental score.
The report includes a lot of other interesting details, some of which may surprise you; but rather than retelling it here, I encourage you to watch the interview with Anderson on the VISION by Protiviti website. You can also download the report here.
For more visionary content on ESG and other topics, subscribe to the VISION by Protiviti newsletter.