New IBM Study Reveals Inadequate Data Hinders Progress Against Environmental, Social and Governance Goals

LONDON, UK, April 17, 2023 - A new global IBM (NYSE: IBM) Institute for Business Value (IBV) study, The ESG ultimatum: Profit or perish, of executives and consumers reveals that while environmental sustainability remains a top priority for consumers and business executives, inadequate data is a key challenge for both groups when it comes to achieving personal and corporate Environmental, Social and Governance (ESG) goals.

The study* reveals that surveyed UK executives point to inadequate data (42%) and inconsistent standards (42%), as the biggest obstacle to their ESG progress, followed by inadequate skills (37%) and regulatory barriers (34%). Without the ability to access, analyse and understand ESG data, companies struggle to deliver greater transparency to the consumer a key stakeholder and meet consumer expectations.

Seventy-four percent of globally surveyed executives believe that stakeholders understand their organisations' ESG objectives and performance, yet only about 4 in 10 surveyed consumers feel they have enough data to make environmentally sustainable purchasing (41%) or employment (37%) decisions.

Consumer commitment to environmental sustainability and social responsibility has intensified with consumers voting with their wallets, said Jonathan Wright, Global Managing Partner Sustainability Services and Global Business Transformation, IBM Consulting. As a majority of consumers prefer to buy from and work for ESG leaders, businesses must prioritise transparency and break down barriers to ESG data.

Other UK study findings include:

Companies are investing in ESG and see it as good for business

67% of surveyed executives say ESG is central to their business strategy.

Just over 3 in 4 surveyed executives (66%) view ESG as a revenue enabler rather than a cost center, suggesting that contrary to popular opinion, ESG and profitability are not at odds.

78% of executive respondents agree or strongly agree that their organisation focuses on achieving ESG outcomes, not just reporting requirements.

Consumer commitment to sustainability has intensified, but consumers don't feel they have sufficient information to make informed choices

Over half of the consumers surveyed say environmental sustainability (57%) and social responsibility (51%) are very or extremely important to them.

67% respondents say the cost-of-living increases have made environmentally sustainable decisions more difficult in the last 12 months.

Only 1 in 5 surveyed consumers say they have sufficient information to make sustainable investing and saving decisions.

Executives admit their companies haven't made significant progress toward ESG goals, indicating data challenges impact their ability to measure progress and meet consumer demands

94% of surveyed executives say their organisations have developed ESG propositions; however, only 42% have made progress against them.

Almost 3 in 4 surveyed executives (74%) say their organisations struggle to manage an overload of manual data, while 8 in 10 say they have difficulty consolidating or manipulating data.

The study highlights ESG leaders, a sub-set of respondents with greater maturity in operationalising ESG, who are seeing higher revenue, improved profitability, deeper customer engagement by approaching ESG as a transparency play that creates strategic business opportunities. These role models provide a roadmap for organisations looking to overcome data-related challenges and create sustainable change that includes: automating ESG processes and reporting capabilities to keep data current; tapping AI for enhanced insights into performance, forward looking analysis, and scenario development; aligning with ecosystem partners on ESG metric definitions and standards; and proactively establishing ESG data governance principles with stakeholders.

Data is the lifeblood of ESG. Now is the time for enterprises to put information in the hands of operators who can make informed business decisions that improve their ESG impact daily, said Wright.

To view the full study, visit: https://ibm.co/esg-ultimatum

*Study Methodology

The IBM Institute for Business Value (IBV) surveyed 2,500 executives across 22 industries and 34 countries, delving into their organisations' ESG strategy, approach, and operationalisation; what benefits they expect from ESG initiatives; and how they weigh ESG against other business objectives. The IBV also surveyed more than 20,000 consumers across 34 countries about their attitudes toward sustainability and social responsibility, and how these beliefs influence shopping, investing, and career decisions.

About the IBM Institute for Business Value

The IBM Institute for Business Value, IBM's thought leadership think tank, combines global research and performance data with expertise from industry thinkers and leading academics to deliver insights that make business leaders smarter. For more world-class thought leadership, visit: www.ibm.com/ibv.

Media Contact:

Imtiaz Mufti

IBM External Relations

Imtiaz.Mufti@ibm.com

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