The majority of CEOs (74%) in the UK believe that environmental, social, and corporate governance (ESG) is equally as important as financial performance, according to ECI’s Growth Characteristics report. Although it may once have been considered a ‘nice to have’, both ESG and social purpose are now key to informing business strategies in 2023 and beyond.

The research, which saw responses from over 500 CEOs in the UK, has also found that social purpose has significantly progressed up leaders’ agendas since last year’s survey. Now, only 2% say it doesn’t inform their strategy at all, down from 15% last year.

Stephen Roberts, Partner at ECI said:

“The role of ESG and social purpose within businesses is increasingly important. CEOs want to improve the world in which they operate, and they see ESG – and more specifically, social purpose – as a necessity for the growth and success of a business. From a talent perspective alone, employees are increasingly looking at and challenging their employers to step up when it comes to their ESG strategy. In today’s ultra-competitive talent landscape, having a strong social purpose can set companies apart from their peers.

“Progress in this area not only helps with the employee value proposition, it is also attractive for new customers and investors. Furthermore, there are clear regulatory drivers to enhance sustainability and governance, and there is plenty of evidence that creating a diverse and inclusive business leads to better growth prospects.”

Different sectors have also shown different priority levels when it comes to ESG. 78% of Financial Services firms stated that ESG was as important as financial performance.

Regulators across the UK, EU and beyond have recognised the important role the Financial Services industry plays as a lever for sustainable change around decarbonisation across portfolios, investing in ‘greener’ businesses and funding the overall energy transition.

Stephen Roberts, Partner at ECI said:

“As shown during the recent World Economic Forum Annual Meeting at Davos, sustainability is one of the key fundamental goals that world leaders and the world’s largest businesses are considering. Regulators, customers, employees and investors focused on this topic, and for the businesses of today to thrive in the future, everyone must act now to mitigate the worst impacts of climate change.”