Environment, social and corporate governance boosts profit, UK businesses lead world

Market analysis conducted by digital identity specialists ID Crypt Global has revealed UK business is setting a leading example when it comes to Environmental, Social and Corporate Governance (ESG).

The report shows that between 2019 and 2020, profit growth for businesses placing high importance on their ESG investment was 9.1% worldwide. This is over 5% higher than those that did not view this aspect of business as significant. 

Globally, the US saw the biggest difference in recorded profits, with 11% growth for those prioritising ESG, 6.3% higher than other firms that have not taken notable steps in that area. 

However, while American corporations lead the way in terms of making ESG translate into profit, UK companies are recording much higher scores in terms of ESG performance compared with every other country. 

Looking at the five biggest businesses on the planet – Apple, Microsoft, Alphabet and Amazon in the US, and Saudi Arabia’s Saudi Aramco – the average ESG score was 37.4 from a possible 100. Microsoft ranked highest, with 56/100, while Amazon could only muster a lowly 22/100. 

Meanwhile, the five biggest companies in the UK – Shell, AstraZeneca, Linde, HSBC, and Unilever – recorded an average of 69.4/100. Linde and Unilever were awarded an impressive 81/100, HSBC 62/100 and Shell 43/100. The oil giant scored much better than the other industry peer in the study, Saudi Aramco (26/100). 

‘ESG is about ensuring that the world’s business and corporate pursuits do not continue to cause irrevocable damage to the planet and its people. Unfortunately, it’s primarily being used to identify the risks and opportunities that will affect a business and its long-term sustainability and success, while also increasing profits,’ said Lauren Wilson-Smith, CEO and Founder of ID Crypt Global.

‘It’s also fair to say that the current methods of assessing an organisation’s ESG capabilities are inefficient and costly, to say the least. If we really want to drive ESG forward we need to make the process as straightforward and transparent as possible,’ she continued. ‘So while it’s great to see UK businesses performing well on the world stage, further work is needed to ensure that ESG practices are more widely adopted and for the right reasons.’

Revisit our long read feature on the power of business to achieve net-zero.

Image: Mark Higham