Greenhouse gas emissions have made governance the number one priority for ASX-listed companies, according to a new survey from investment firm Perennial Partners.
Diversity dropped from third to second in 2020, overtaking governance which fell to third. Of all industries, REITs rated sustainability the highest at 9.7 out of 10, followed by building materials at 9.2 and utilities at 8.3.
The results of the survey, which is in its third year, also highlighted more tangible actions in ESG beyond mere formal recognition.
A total of 38% of companies said they measured and disclosed emissions from scopes 1, 2 and 3, while 33% did so for scopes 1 and 2, and 12% did not do all of them. Less than half, or 40%, had emissions targets aligned with the Paris Agreement.
Meanwhile, 38 percent of companies had a goal of reducing water consumption and 57 percent had a goal of reducing or improving waste management. These were up from 32% and 53% respectively in 2019.
Over 88% of responding companies had a board member or senior manager responsible for ESG, and an additional 81% had a business strategy that specifically referred to ESG and sustainability.
This was true for businesses large and small, and of those that included ESG in their strategy, 80% said they saw positive business results. Additionally, 93% said engaging with investors on ESG and sustainability issues was beneficial for the company.
“This year’s results revealed that the pandemic has not stopped boards and senior management from seeking to improve ESG practices and policies,” said Emilie O’Neill, co-ESG manager of the fund. of sustainable development.
“This shows that Australian businesses are starting to understand the urgency and the opportunity to act on climate risk.”