Nearly half (49%) of global investors are willing to give up investing in companies that do not have sufficient environmental, social and corporate governance (ESG) initiatives, and 79% say that managing ESG risks and opportunities is an important factor in making future investment decisions, according to the PwC 2021 Global Investor ESG Survey report.

“Investors are simultaneously focused on short-term results as well as long-term ESG issues that can create both risks and opportunities for their investments. Investors have realized that ESG has become an integral part of companies’ strategy even when they see that this commitment is lacking and does not hesitate to take measures, including reorienting some investments to other companies,” said Monica Movileanu, ESG Partner and Leader, PwC Romania.

Although most investors are willing to take action if organizations do not address ESG issues, they do not want the return on investment to be adversely affected by ESG initiatives. Thus, 81% would not accept a decrease of more than one percentage point in the return on investment generated by the achievement of the ESG objectives, and almost half (49%) would not accept any reduction in profits.

According to a company statement, climate issues are the main ESG aspect considered by the interviewed investors, followed by ensuring the health and safety of workers and improving the workforce, diversity, equity and inclusion.

The communiqué also mentions that the survey highlighted a number of shortcomings in the current ESG reporting, with only a third of investors considering the current quality of reporting to be good enough. Simply put, relevant, complete and comparable information is missing, so that stakeholders can easily differentiate between companies in terms of ESG performance, and this makes capital allocation decisions difficult.

Thus, 83% of investors point out that it is important for reports to provide detailed information on progress towards the ESG targets. Also, 75% say they have more confidence in independently audited ESG reporting.

The PwC Global Investor ESG survey was conducted in September-October 2021 among 325 investment professionals from 43 states. At the same time, 40 in-depth interviews were conducted with investors holding more than $ 11.6 trillion in assets under management.