Top ESG trends for enterprise companies to watch in 2024

ESG factors have become vital considerations for businesses and investors around the world.

ESG encompasses a wide range of issues, from climate change and resource scarcity to labour practices and corporate board diversity.

In recent years, these factors have moved from the fringes of finance and business to the mainstream as stakeholders increasingly demand more sustainable and socially responsible practices.

The rise of ESG can be attributed to various factors, each contributing to its increasing significance in the global business landscape.

• Changing consumer preferences: Today's consumers are more environmentally conscious and socially aware. They prefer products and services from companies that demonstrate responsible practices and values aligned with their own.
• Evolving regulatory environments: Governments worldwide are implementing stricter regulations to ensure companies follow sustainable practices, adhere to ethical norms, and maintain transparency in their governance.
• Financial performance and risk management: Companies are realising that strong ESG performance can lead to better financial outcomes, while poor ESG performance can pose significant risks. Investors are increasingly integrating ESG factors into their decision-making processes to mitigate potential risks.
• Societal pressure and activism: Increased activism from social movements and non-profit organisations is pressuring corporations to adopt responsible practices, further pushing ESG considerations to the forefront.
• Employee expectations: Current and prospective employees are looking to work for companies that are committed to ESG principles, which is pushing businesses to improve their ESG performance to attract and retain talent.

The role of public opinion in shaping ESG trends

Public opinion plays a significant role in shaping ESG trends. What people think and believe about environmental, social and governance issues can influence how companies behave and what they prioritise.

This shift in public sentiment is pushing companies to prioritise ESG and is reflected in the evolving regulatory landscape.

Major ESG milestones and developments in 2024

Several major milestones and developments in 2024 have further cemented the importance of ESG.

• ESG has now become mainstream, with ESG issues being among the lead stories of most major newspapers every day
• Over 80 countries now have laws or regulations that regulate ESG reporting
• There are over 2000 different regulations now in place that require some form of reporting of ESG-related metrics
• The EU now requires more companies to have whistleblowing systems in place (an essential part of ESG)

Insights from key governing bodies on ESG development

Key governing bodies around the world have also echoed the importance of ESG, issuing guidelines and regulations that encourage or require companies to consider these factors.

• Over 80 countries already have laws on reporting ESG
• ESG continues to be driven by NGOs setting standards around financial disclosures and global reporting initiatives

ESG regulations in the United States: recent changes and impacts

ESG regulations have evolved significantly. Key developments include:

• SEC's ESG disclosures – the Securities and Exchange Commission (SEC) has amplified its emphasis on ESG disclosures, urging corporations to provide more detailed and accurate data regarding their ESG performance
• climate risk disclosures – climate risk disclosures have been given particular attention, with companies required to provide insight into how their operations and strategies are impacted by climate change.

These changes have encouraged more transparency and accountability among United States corporations, leading to an overall increase in ESG compliance and performance.

A look at the United Kingdom's ESG regulatory landscape

The United Kingdom has also seen significant changes in its ESG regulatory landscape, including:

• mandatory TCFD-aligned disclosures – the United Kingdom Government has made it compulsory for certain businesses to disclose their climate-related financial risks in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD)
• pension fund regulations – United Kingdom pension funds are now required to consider ESG factors in their investment decisions, reflecting the growing importance of ESG in investment management.

These developments have led to a surge in integrating ESG into business strategies and operations within the United Kingdom, enhancing the nation's commitment to sustainability.

European Union approach to ESG: notable regulations and their effects

The European Union continues to lead the way in ESG regulation, with:

• the EU Taxonomy Regulation – a classification system establishing a list of environmentally sustainable economic activities, which has been fully implemented, guiding investors and businesses towards more sustainable technologies and activities
• the Sustainable Finance Disclosure Regulation (SFDR) – requires financial market participants and advisers to make pre-contractual disclosures on how they integrate ESG factors into their risk processes, providing more transparency for investors.

These regulatory measures have further solidified Europe's position as a global leader in ESG, fostering a more sustainable and resilient economy.

Importance of tech in facilitating ESG programmes

Technology plays a pivotal role in facilitating ESG programmes within enterprises. From collecting and analysing ESG data to improving transparency and reporting, technology can enhance a company's ESG performance in various ways.

• Building ESG profiles and programmes: There is a need to build an ESG programme, including using an established framework and entering ESG data into a technology platform so it can be used to report status, objectives and performance. ‍
• Incident management: Tech platforms are expanding the use of whistleblower platforms so that anyone can report ESG-related matters to the company, and the company has a mechanism to review and investigate these issues. ‍
• Survey and disclosure tools: Including survey and disclosure tools within the tech platform allows the company to engage with employees or partners, conduct surveys and collect disclosures as part of the information gathering that supports ESG programmes. ‍
• Transparency and reporting: Tech platforms can streamline ESG reporting and increase transparency, making it easier for stakeholders to understand a company's ESG performance. ‍
• Stakeholder engagement: Technology can also aid in stakeholder engagement, allowing companies to communicate their ESG initiatives and progress more effectively. ‍
• Data collection and analysis: Advanced tech tools can help companies collect, monitor and analyse ESG data, leading to better decision-making.

Emerging software solutions for ESG management

To assist with managing ESG, companies are exploring innovative tools and platforms and leveraging new technologies.

• ESG reporting and data platforms: These platforms aggregate ESG data from various sources, enabling companies to track their performance against ESG metrics more easily. ‍
• AI (artificial intelligence) and machine learning in ESG: AI and machine learning tools are being used to predict ESG risks and opportunities, helping companies make more informed decisions.

How enterprises are effectively utilising tech in ESG

A good example of an effective use of technology is using an ESG system with an embedded incident management/whistleblowing system to solve the supply chain risks of human rights and environmental issues.  

More and more legislation requires companies to give their supply chain and any members of the public a voice to specifically report ESG-relevant issues to the company without fear of retribution and anonymously if preferred.

ESG-related job openings in 2024

The demand for ESG-related roles has surged in 2024, reflecting the growing importance of ESG in the business world. Key ESG roles include:

• ESG analysts – to analyse a company's ESG performance and provide insights to guide decision-making
• ESG consultants – to help companies develop and implement ESG strategies to improve their performance
• sustainability officers – to oversee a company's sustainability initiatives, ensuring they align with ESG standards.

Essential skills required for ESG roles

To succeed in these roles, professionals need:

• an understanding of ESG methodologies – including ESG standards as well as frameworks
• analytical skills – to analyse ESG data and draw meaningful conclusions
• communication skills – to effectively communicate with various stakeholders, from employees to investors.

Impact of ESG job growth on the broader job market

The growth in ESG jobs has a broader impact on the job market, driving the demand for ESG skills across various roles and industries.

This trend is likely to continue, further emphasising the importance of ESG competence in the professional world.

The need for ESG services in 2024

As companies strive to improve their ESG performance, many seek external assistance through ESG services.

These services can help companies identify gaps in their ESG performance, develop strategies to address them and monitor progress over time.

Speeki offers a wide range of ESG solutions and services to help enterprises enhance an existing ESG programme or build a programme from scratch.

During the discovery process, Speeki will work with your stakeholders to identify gaps, design and build. No matter what risk area we work on, we apply the same methodology to create a system to manage ESG risk.

Cost-effective ESG services for businesses of all sizes

A range of ESG services has emerged in 2024 to cater to businesses of all sizes.

• ESG programme assessments and consulting services: These services help businesses develop and implement robust ESG strategies. They can be particularly useful for small and medium-sized enterprises that lack in-house ESG expertise. ‍
• ESG reporting tools: These tools streamline the ESG reporting process, making it easier for businesses to communicate their ESG performance to stakeholders.
• ‍ESG training services: These services provide training for employees at all levels of the organisation, fostering a culture of ESG awareness and responsibility.