CLEVELAND--(BUSINESS WIRE)--With corporations under increasing pressure to implement environmental, social and governance (ESG) initiatives, in-house counsel and senior corporate executives will find a useful benchmark against which to measure their programs and progress in “An ESG Snapshot,” a report authored by Thompson Hine’s ESG Collaborative attorneys. The report summarizes the results of a recent firm survey exploring the ESG standards that investors and other key stakeholders are increasingly applying as part of their evaluation to identify material risks and growth opportunities.
“The pressure to implement ESG initiatives is coming not only from investors and shareholders, but from all stakeholders, including consumers and the broader public,” said Thompson Hine partner Heidi Friedman, co-chair of the firm’s ESG Collaborative. “And regulatory agencies are ramping up their own focus on ESG issues, with the SEC’s proposed ESG rulemaking expected this October. If companies are not yet focusing on these issues, now is the time to start.”
Here are just a few of the numerous corporate ESG trends the report explores:
- ESG progress is well underway—but newcomers are still arriving. Almost a third of both public and private company respondents already have an ESG strategy in place, with another third expecting to implement one in the next one to two years. Twenty percent of all respondents (and a third of public companies) characterized ESG as a critical business strategy, and a quarter of the respondents initiated their ESG-related programs and protocols five years ago or earlier, with many others close on their heels. However, 26% of private companies and 2% of public companies reported that they have neither adopted an ESG strategy nor have any current plans to do so.
- Companies expect Data Collection/Verification to be their most significant challenge in both the short and long terms. Public and private companies alike reported that Data Collection/Verification is their most pressing ESG concern over the next year, with Regulatory Activity and Staffing rounding out the top three short-term concerns for public companies vs. Green Initiatives and Staffing for private companies. When asked the same question but looking ahead five to 10 years, respondents indicated that Data Collection/Verification will continue to be their top concern (29%) but will become less of a challenge. Green Initiatives (26%) and Reporting/Disclosure Requirements (24%) rounded out the respondents’ three biggest long-term concerns.
- Companies with higher revenue are more likely to implement ESG strategies, but that’s no guarantee. Perceived ESG leadership and reported implementation figures are generally higher in companies with greater revenue, with all respondent companies reporting annual revenue between $500 million and $1 billion currently using or planning to adopt ESG protocols in the near future. However, more than a quarter of companies with revenue between $50,000 and $500 million and 6% of companies with over $1 billion in revenue reported that they have no ESG strategy in place and no current plans to implement one.
- Diversity, Equity & Inclusion information leads among disclosure categories. When it comes to the types of ESG disclosures companies are currently providing or plan to provide, information regarding Diversity, Equity & Inclusion efforts was by far the top selection of all respondents, followed by information on Board Oversight of Environmental & Sustainability Issues and Ethical Business Practices for public companies and information on Ethical Business Practices and Community Involvement/Charitable Donations for private companies. In terms of disclosing quantitative metrics, demographic data was the top category of current/planned ESG disclosures among all respondents, with public companies primarily focused on Board Diversity Data and private companies focused on Workforce Diversity Data.
“Without a uniform reporting framework to guide them, companies have been in a tough position when it comes to trying to implement effective ESG protocols,” said partner and ESG Collaborative co-chair Jurgita Ashley. “Already, the consequences of getting it wrong have ranged from decreased performance and investment to challenges to director elections to reputational damage. We hope this survey will provide in-house counsel and senior executives with both useful practical information and, when it comes to some of the specific best practices and other comments shared by their corporate peers, perhaps a bit of ‘ESG inspiration’ as well.”
Thompson Hine is committed to staying on top of significant business trends and continuously innovating to meet clients’ evolving needs. This is the firm’s most recent survey, having completed its second survey focusing on innovation in legal services delivery, “The Innovation Gap Persists,” last year, along with several recent employer surveys focusing on employees returning to the workplace and vaccine mandates.
Thompson Hine’s ESG Collaborative is a multidisciplinary team of lawyers with practical legal and business knowledge to help clients develop, implement and fine-tune ESG strategies. The group uses proprietary SmartPaTH™ tools, significant investments in technology and strategies such as legal project management, flexible staffing and value-based pricing to help clients achieve their objectives while providing enhanced value and predictability.
About Thompson Hine LLP. Thompson Hine LLP, a full-service business law firm with approximately 400 lawyers in 8 offices, was ranked number 1 in the category “Most innovative North American law firms: New working models” by The Financial Times and was 1 of 7 firms shortlisted for The American Lawyer’s inaugural Legal Services Innovation Award. Thompson Hine has distinguished itself in all areas of Service Delivery Innovation in the BTI Brand Elite, where it has been recognized as one of the top 4 firms for “Value for the Dollar” and “Commitment to Help” and among the top 5 firms “making changes to improve the client experience.” The firm’s commitment to innovation is embodied in Thompson Hine SmartPaTH™ – a smarter way to work – predictable, efficient and aligned with client goals. For more information, please visit ThompsonHine.com and ThompsonHine.com/SmartPaTH.