CEOs move away from ESG targets as recession risks rise

Bloomberg — CEOs have put some ESG (Environmental, Social, and Governance) targets on hold as they try to deal with the fallout from a potential recession, according to a study by KPMG.

KMPG notes that about half of the CEOs interviewedSuspend or reconsider their current or planned ESG efforts for the next six months. About a third, he added, “have already done so.”

“As CEOs take measures designed to insulate their companies from the next downturn, ESG initiatives are under increasing financial pressuresaid Jane Lowry, global head of corporate affairs at KPMG.

The majority of executives interviewed emphasized that, typically, Environmental, social and governance issues are an essential part of its success. However, with the challenges posed by the economic downturn, companies are currently struggling to balance “environmental concerns in the medium term and protecting social and economic stability in the short term,” Lowry explained.

more than Eight out of ten global CEOs expect a recession in the next 12 monthsAccording to a KPMG survey. In this context, spending resources on ESG objectives that are not fully defined within regulatory frameworks sliding down the priority list, As indicated by KPMG data. Also, there are some signs of doubt From investors towards ESG.

KPMG CEO Outlook Report Based on responses from 1,325 CEOs from different sectors and countriesIt was held between July 12 and August 24. All participants have annual revenue of at least $500 million, and a third of them have revenue of more than $10 billion.

Furthermore, a recent survey conducted by Capital.com, a London-based online broker with a large retail client basethat traders and investors do not prioritize environmental, social and institutional governance. Among more than 1,800 clients consulted, 52% of traders and investors have never said Pick a stock or enter into a transaction based on ESG factors. nearly half or 46% said they don’t know how to do itand 12% said ESG investments were too expensive.

The results reveal some of the Main weaknesses faced by environmental, social and corporate governance, as the method of investment receives criticism from all sectors. in the United States of America., More than a dozen traditionally republican countries try to prevent the financial industry from taking ESG factors into consideration, because they are trying to protect industries like oil and firearms. from your sideAnd the Many ESG experts have criticized the investment model for being riddled with inconsistencies and focusing too much on profit.

However, a wave of new regulations is poised to change the business and investment landscape in ways that will make it difficult for CEOs to downplay the importance of ESG. In the European Union, investors must comply with the regulation on sustainable financing disclosure, while companies face more stringent requirements in the form of the Corporate Sustainability Reporting Directive.

In the United States, the Securities and Exchange Commission owns The proposed stringent climate disclosure requirements, and globally, The International Sustainability Standards Board sets guidelines that are likely to impact businesses in all jurisdictions.

KPMG noticed that a file 72% of respondents They said they “believe that stakeholder scrutiny of ESG issues” Like gender equality and climate impacts, “You will continue to accelerate.” According to the survey, there is also pressure on companies to ramp up ESG reporting.

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