QCA members on the whole believe that ESG is both beneficial to business and a discipline that will be far more deeply integrated into business practice over the coming years.
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During March 2022, 57 members of the Quoted Companies Alliance (QCA) were surveyed on their perspectives on sustainability, with questions based on early-stage learning from six in-depth interviews with members.
The resulting report, which has just been released, shows that ESG integration is no longer seen as a "nice-to-have", even by small companies which don’t have the resource of their larger counterparts to take on the challenge of sustainability strategy and reporting. QCA members on the whole believe that ESG is both beneficial to business and a discipline that will be far more deeply integrated into business practice over the coming years.
In this blog, we take a whistle-stop tour of the report’s findings – furnishing you with the stats and facts to drop into your next sustainability meeting.
Benefit or burden?
Over 70% of respondents have a very positive attitude to ESG. The structure and process that is needed for effective ESG management is welcomed as beneficial to business and is understood to offer enhanced opportunity for engaging stakeholders.
Whilst reporting requirements are seen as burdensome and bureaucratic in some cases (often in smaller businesses), others see the increased transparency and reporting discipline as a positive step towards building a more sustainable business.
Is there a plan?
Around 60% of respondents have a clear and formal ESG policy and/or strategy. This includes a roadmap with defined goals.
Most of those who don’t are in the process of gathering information to work towards a more developed plan.
Informed or confused?
21% of respondents consider themselves and their companies to be very well informed about ESG.
65% believe they are moderately well informed.
Understanding of the topic is continually increasing (based on QCA 2020 survey) and many respondents are working towards improving their ESG credentials as they get to grips with the agenda.
Just 7% feel not very well informed.
Strategy development:
challenging but necessary
- 60% of respondents have a clear strategy and policy, and the majority of those that don’t are in the process of gathering data to develop one.
- There is generally a perceived lack of resource and skill internally to manage the process.
Governance reporting is easiest
- 78% of respondents identified governance as the easiest pillar to report due to familiarity and existing methodologies.
- Views on the challenges of social and environmental reporting were mixed, with a recognition that the demands of these pillars are very variable from one industry and organisation to the next.
Frameworks: a burdensome "box-ticking" exercise?
- Of those surveyed, 60% had adopted a framework for reporting specific areas (eg SECR, TCFD, SASB or GRI).
- Of the respondents who weren’t reporting to a framework, most felt their impact on the environment to be limited due to their small size, and formal reporting would be an undue burden
Scope 3: in the "too difficult" pile
- 75% of businesses interviewed were measuring carbon emissions. Focus currently tends to be on Scopes 1 & 2, with Scope 3 considered to be very challenging and a future goal.
Questions?
We hope you've found this summary interesting and welcome and questions you have on the QCA report: ESG in Small & Mid-Sized Quoted Companies - Perceptions, Myths and Realities.