What were key ESG concerns for companies in 2022?

A survey of 55 ASX-listed companies across various sectors and market cap sizes has explored their key ESG priorities in the last year.

The 2022 Perennial Better Future Survey found that, while greenhouse gas (GHG) emissions and diversity still commanded strong corporate attention, cyber security was the pivotal theme in 2022.

Cyber security came up from the fourth position in 2021 and was a priority for both smaller and larger companies. Many reported concerns in this area which included litigation, reputational risks, and regulatory attention. 

“We have seen ESG priorities move around from year to year, and generally greenhouse gas (GHG) emissions, diversity, governance and modern slavery are considered the most important to ASX-listed corporates. However, in 2022, cyber security emerged as the most important theme,” said Emilie O’Neill, co-head of ESG at the Perennial Better Future Trust. 

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The survey found sustainability and ESG remained crucial to corporates, who gave it a score of 7.7 out of 10 on a scale of importance over the next five to 10 years. 

Some 80% said a focus on ESG and sustainability had resulted in positive business outcomes. 

Damian Cottier, co-head of ESG and portfolio manager on the Perennial Better Future Trust explained: “The survey seeks to gaze into the collective mind of corporate Australia to understand how deeply it is concerned with ESG and sustainability. 

“We had a really broad range of companies participate – from the major banks to microcap stocks.  The outcomes are fascinating on a whole range of issues, and it is intriguing to see how thinking has changed in each of the four years since the survey was first conducted".

Another ESG issue that was top of mind was gender diversity.

O’Neill observed, “Industry difficulties in attracting gender diverse talent pools was the biggest inhibitor to achieving a gender diverse workplace in 2022, consistent with prior years.

“Competition for top female talent remained in second position and intensified in 2022. Lack of university graduates remained stable.”

Additionally, reconciliation appeared to be growing in importance. While less than a quarter (24%) of companies surveyed had launched a reconciliation action plan (RAP), 25% were planning to in the next year and a half.

The survey found 49% of companies had a dedicated person or team that spent 75% or more of their time on ESG matters. When examined by company size, some 68% of larger companies had a dedicated employee compared to 30% of smaller companies.