There is a global gap in environmental, social, and governance (ESG) performance, coupled with declining public trust in governments and corporate behaviour, according to SEC Newgate’s fourth annual ESG Monitor report.
The report, which surveyed over 14,300 people across 14 countries, highlighted that businesses and governments are failing to meet public expectations regarding ESG-related conduct.
The study found that nearly three in five respondents (58 per cent) rated responsible ESG behaviour from governments as highly important, giving it a score of 9 or 10 out of 10.
Similarly, 54 per cent expected large businesses to act responsibly on ESG matters, although expectations for small and medium-sized enterprises (SMEs) were lower, at 37 per cent.
Despite these high expectations, the perceived performance in delivering strong ESG outcomes was modest across the board.
Just over half of respondents rated governments and large businesses with a score of 7 out of 10 (53 per cent and 54 per cent, respectively), while SMEs fared slightly better at 58 per cent.
Additionally, nearly two-thirds of respondents (65 per cent) believe that companies should play a more active role in society, though finding the right balance remains crucial.
A strong sentiment also emerged that good ESG performance should not come at the expense of profitability, with 73 per cent agreeing with this view.
The report also found that global understanding of the term “ESG” has remained steady in 2024, with 54 per cent of respondents claiming a good understanding, up slightly from 53 per cent in 2023.
Participants in Hong Kong (43 per cent), Singapore (41 per cent), and the United Arab Emirates (39 per cent) were the most likely to claim a good grasp of ESG, while Greece (11 per cent), Colombia (11 per cent), Poland (9 per cent), and Spain (9 per cent) reported the lowest levels of understanding.
A notable demographic finding was that those most familiar with the term ESG are typically men under the age of 50, with a university education and a close interest in current affairs.
When asked about their concerns surrounding ESG issues, the overwhelming majority (73 per cent) agreed that companies need to communicate more clearly about what they are doing to improve their performance on environmental, social, and governance matters.
Almost half (44 per cent) of respondents said they do not trust what companies say about their ESG activities or performance.
Commenting on the findings, Fiorenzo Tagliabue, CEO of SEC Newgate, said that “the global ESG Monitor report underscores gaps in corporate communication”.
“The vast majority of respondents believe that companies need to clearly articulate what they are doing to improve their ESG performance to meet stakeholders’ needs,” he added.
He also stated that complying with ESG standards is a first step, ensuring that the business meets regulatory requirements, but it does not necessarily indicate excellence or an ambitious plan for change through corporate operations.
“A cautious approach is needed to overcome scepticism, with many not trusting companies’ claims about their ESG initiatives, and believing that companies focusing on ESG initiatives are politically motivated,” Tagliabue said.
“Businesses are under intense scrutiny on ESG issues, but failing to act ambitiously and transparently on their plans and achievements in this area poses a significant reputational risk,” he added.
The survey also asked respondents about their top global concerns, revealing the following key issues: ensuring access to quality and affordable healthcare for all, reducing crime and violence, tackling rising living costs, securing safe and affordable food, and strengthening the economy.
When asked about the future of their own countries, optimism varied widely by region, with the highest levels in the UAE, Singapore, and Hong Kong.
Despite slight improvements compared to the 2023 report, the majority of respondents believed their country was heading in the wrong direction.
Globally, 47 per cent of people thought their country was on the right track, compared to 49 per cent in 2023. The UAE led with 97 per cent, followed by Singapore at 86 per cent and Hong Kong at 75 per cent.
In contrast, countries such as France (16 per cent), Greece (26 per cent), and Germany (29 per cent) recorded lower levels of optimism about their national direction.
Sue Vercoe, Managing Director of SEC Newgate Australia and Director of SEC Newgate Research, explained that “the annual ESG Monitor report has shown that people have high expectations of organisations when it comes to responsible behaviour on ESG matters but lower expectations of governments and businesses”.
“Despite other concerns affecting people’s daily lives, most still consider environmental, social, and governance issues important,” she added.
“This presents both a communication and operational challenge for businesses and governments, as there remains a gap to bridge in addressing ESG issues,” Vercoe concluded.
