Home ESG ESG Spending is Both Up and Down – Depending on Who You Ask

ESG Spending is Both Up and Down – Depending on Who You Ask

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Is ESG still a corporate priority and are companies continuing to invest in related initiatives? Well, it depends. If you ask automotive supply chain executives, the answer seems to be “no” according to results from a new CapGemini survey:

“Sustainability efforts are faltering as automotive organizations fire-fight supply chain crises. Successive supply chain crises have sapped automakers’ time and diverted focus and money away from sustainability initiatives. This is particularly true of suppliers, whose sustainability investments have dropped significantly (in contrast, OEMs’ investments have increased slightly). One in three automotive companies still lacks a comprehensive sustainability strategy, with many existing initiatives put on hold. A shortage of suppliers of recycled materials (and of the materials themselves) has delayed scaling of circular-economy initiatives.”

In contrast, Bloomberg and Adox Research (a consulting and research firm for capital markets) conducted a survey in March of 2023 on ESG data acquisition & management. Although that survey is now a few months old, the results showed that of the 100+ portfolio managers, climate risk executives, and data management executives that responded:

“The vast majority of executives (92%) plan to increase their ESG data spend by at least 10%, with 18% planning an increase of 50% or more.”

This may not actually be completely contradictory to the automotive industry results which also showed “OEMs lack confidence in suppliers’ self-reported sustainability data. This general lack of transparency hampers business-critical activities such as risk management and sustainability initiatives, as well as exacerbating challenges in procurement and replenishment.” Maybe one way to look at this is that companies appear to be interested in spending on ESG data. The question then becomes whether they also interested in spending on initiatives for ESG data generation in the first place? Or that operationalize ESG data obtained internally as well as suppliers and portfolio companies? Answers to those questions are going to be company-specific, so it is best not to rely too much on generalized survey results. Instead, speak with your internal executive and operations leaders to understand your own company’s position, needs and plans relative to ESG prioritization, implementation and spending.

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