Here are some of the key learnings & figures I’ve selected from the report, focusing on the broader context and longer term perspective.
1. ESG GETS REAL:
– “ESG used to be much more of a communication exercise, but it has evolved to be more about actions and initiatives”.
– 6x: Employees are six times more likely to promote their organisation as a great place to work if they believe sustainability-related communications are backed up by actions.
– 84% of global ESG assets are based in Europe.
BUT…
– 4 in 10 Council members say one department offering an objection to a proposed initiative can derail the entire program.
– 45% spend more time dealing with reporting requirements around ESG than delivering on priorities.
2. ESG STRATEGIES:
– “There’s now a recognition of the costs of inaction… the repercussions of not acting can be significant in terms of reputation and the bottom line
– Key criteria to develop ESG initiatives are captured in the Ipsos’ PACE framework:
-> Pertinent: Do the strategy and activation initiatives address key issues that stakeholders prioritise?
-> Authentic: Does the company have an authentic voice regarding this issue, i.e., is it part of our mission and values?
-> Credible: Can we credibly engage on this issue without fear of perceived greenwashing, and do our business operations demonstrate our credibility on the issue?
-> Effective: Are our strategy and the tactics/ initiatives we develop driving effective progress and impact against the issue we’re trying to address?
3. ESG AND POLITICS: GLOBAL GOALS OR POLITICAL FOOTBALL?
– 44% of ESG Council Members agree that ESG is more of a political football than it is a priority for politicians and government.
– “The lack of certainty is indeed a challenge. We’re in a significant transition of how economies function this decade, which makes it harder to move quickly on investments due to shifts in approaches.”
– 3 strategies identified to avoid political entanglements:
-> #1: Alignment with the purpose and mission of the company, to avoid greenwashing or “woke capitalism”.
Alignment between the company’s supply chain and its sustainability programs is also more meaningful to stakeholders if it addresses issues in the supply chain.
-> #2: Stakeholder balancing: not all stakeholders are equal.
Employees, investors and consumers are key stakeholders as political actors become more fickle.
-> #3: Keeping a low profile (more for BtoB companies).
4. FROM COST CENTRE TO VALUE CREATOR: 3 FOUNDATIONAL LEARNINGS EMERGE FROM COUNCIL MEMBERS’S EXPERIENCE OVER RECENT YEARS:
LEARNING 1:
ESG success demands holistic and integrated strategy:
“either/ or” approach no longer works although it may have been evident in early stages.
It’s also a reason why some are moving away from the language of “ESG” and adopting more holistic terms like “Corporate sustainability” or “Responsible business”.
LEARNING 2:
Strong governance is the key to actual progress: “Governance is the how and the others (E,S) are the what”.
LEARNING 3:
Further prioritisation of effort is context-dependent.
– In developed markets, for example, social needs can be less pressing, hence a stronger focus on the environment as opposed to developing markets where extreme disparity in wealth distribution drive social needs.
– Double-materiality assessment is one process often used to help prioritize ESG investment.
– Market-specific regulatory frameworks also influence ESG investment with Council Members acknowledging the old truth that what gets measured, does indeed get done.
5. MEASURING THE ROI OF ESG INVESTMENTS IS DIFFICULT:
Council members agree that today, measuring the ROI of ESG investment is difficult, inconsistently done and in need of specialty practitioners.
– Best practice #1: Integrate ESG metrics into financial decision making
– #2: Utilise both Quantitative and Qualitative measurements
– Internal Rate of Return, payback periods, cost savings
– Corporate reputation, customer loyalty, employee engagement, risk mitigation
– #3: Leverage external frameworks and standards
– #4: Communicate the business value internally and externally
– #5: Embrace a long-term perspective, by focusing on long-term value creation and anticipating regulatory and market trends.
6. MINDSET SHIFT: ESG AS THE ROUTE TO GROWTH
– Although there is an agreement on the long-term necessity of ESG: “The significant change for us is recognising that ESG is not an adjunct but should be central to every decision we make”
– 16% of ESG Council Members find it difficult to tell stories about sustainability that resonate with stakeholders
– And the fundamental tension between Intrinsic value proposition and extrinsic ESG commitments remains, partly explaining the “say-do gap” both among the public and organisations.
CONCLUSION: IS INNOVATION THE WAY TO GROW WITH ESG?
I’ll leave the final word of conclusion to this Council member:
“The real challenge for the future in my opinion is to have the courage to really innovate, because many of the problems we have today cannot be changed with incremental improvement, which is what we are used to, to which I associate a more measurable level of risk.”
Full report downloadable here: Ipsos ESG Council Report 2025.