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Environmental, Social, and Governance (ESG) has become an increasingly important consideration for the mid-market in the USA. We set out to survey 100 business executives and sustainability leaders across 17 industries with revenue between $500 million and $2 billion to better understand where they are in their ESG journeys, current ESG trends, the challenges they are facing, and how they addressing their ESG challenges.
Our research revealed that the pressures to collect and report on ESG data are being felt keenly in the C-Suite of mid-market, US companies. Executives report being tasked with the challenge of building an ESG program from the ground up and meeting the increased demands for sustainability data from regulators, customers, investors, and other stakeholders.
Read on for more findings from our ESG Trends Survey report, including the importance of ESG in the mid-market today, the challenges they face, and the solutions they have.
Our survey revealed that the mid-market is gearing up quickly to meet regulatory and stakeholder pressures around ESG. As a result, external vendors and software in this space are becoming indispensable allies in the ESG journey.
Andries Verschelden, CEO & Co-Founder, Good.Lab
In today’s dynamic business landscape, it’s evident that ESG factors have become nothing short of pivotal within the strategic frameworks of mid-market companies across the United States.
The findings of our comprehensive report underscore the undeniable truth: ESG integration is now an indispensable cornerstone of business strategies. A staggering 82% of the surveyed mid-market companies resoundingly acknowledge that ESG considerations are not just relevant but are, in fact, profoundly essential to their operations today.
Moreover, the statistics paint a vivid picture of the ESG reporting revolution happening within this sector. A resounding 85% of these businesses are already actively sharing their ESG performance data, be it through public disclosures or internal reporting mechanisms. This revelation echoes the growing emphasis placed on ESG by stakeholders, including customers, investors, regulators, and the wider community.
82% of surveyed companies believe ESG is very or extremely important today, and 85% are already sharing their ESG performance through public or internal reports.
As we delve deeper into the survey results, it becomes clear that the mid-market is not merely recognizing the significance of ESG but actively embedding it into their operations.
The impact of new climate disclosure regulations like California’s New Climate Disclosure Regulations SB 253 and SB 261 and increased sustainability-related risks will likely further increase the mid-market’s attention on ESG. This profound shift underscores the urgency of aligning business practices with sustainable principles, setting the stage for a future where ESG considerations are essential.
Starting an ESG program, collecting data, and reporting is a net new process for many growing US companies. Therefore, they have faced many challenges getting their ESG programs off the ground.
The primary challenges indicated by the survey respondents were the lack of ESG expertise within their companies (55%), access to sustainability data (47%), and a lack of time and resources to enact ESG policies (49%).
External vendors have been critical for companies to fill their ESG expertise gap. Similarly, software solutions have been essential in automating time and resource-intensive processes and collecting data.
Almost three-quarters of companies (73%) already do or plan to use external vendors or ESG software solutions to meet their ESG targets, build strategies, collect data, and report.
The most common ESG vendor companies use are accounting firms at 58%, followed by ESG and sustainability consultants at 49%. The most common reason companies use software is for climate-related data collection, strategy, and reporting, which comes as no surprise given the urgency and complexity of climate change.
The survey was conducted with our data partner, Ovation Market Research, and in conjunction with CPA.com.
For further insights, download the full report to discover the types of initiatives companies are undertaking today, what are the main factors motivating them, who is making decisions at companies, and unique insights into the ESG trends shaping the US mid-market.
Disclaimer: Good.Lab does not provide tax, legal, or accounting advice through this website. Our goal is to provide timely, research-informed material prepared by subject-matter experts and is for informational purposes only. All external references are linked directly in the text to trusted third-party sources.
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