- 58 percent of companies surveyed say ESG is critical to the long-term success of their business
- Only 29 percent of companies surveyed include ESG-related goals and key performance indicators for their C-suite
- 34 percent of companies surveyed have a dedicated ESG function
SINGAPORE – Media OutReach
– 18 April 2023 – Aon plc
(NYSE: AON), a leading global professional services firm, today released its 2023 Asia Pacific Corporate Governance and ESG Survey Results
which found that while the surveyed companies indicate environmental, social and governance (ESG) issues are critical to their organisations, most are lagging in integrating ESG measures – either via aligning to goals and key performance indicators (KPIs) or allocating a dedicated function to monitor ESG issues.
Despite 58 percent of surveyed companies stating ESG is critical to their long-term success, only 29 percent include ESG-related goals and KPIs for their C-suite, with most companies in Asia Pacific still in the early stages of using ESG metrics and developing their ESG profile.
While only 34 percent of companies reported having a dedicated ESG function, business strategy – instead of compliance requirements – is the primary driver of action on ESG in Asia Pacific, as the regulatory environment is still evolving in most of the surveyed countries. Linking ESG to financial incentives is needed
Accelerating and expanding ESG efforts requires boards and management in the region to better understand the link between ESG and business strategies and use metrics and performance measures as their ESG maturity improves.
“Incorporating ESG performance criteria into executive compensation plans means ESG metrics are more likely to align with the company’s overall strategy and compensation plans. It is becoming clear that failing to address and integrate ESG metrics in the future will expose companies to reputational risk, financial impacts and regulatory consequences as they navigate new forms of volatility,” said report author Boon Chong Na, advisory partner and corporate governance and ESG lead, Human Capital Solutions for Asia Pacific at Aon. “However, while improving ESG metrics, companies need to manage both the financial and non-financial aspects, as shareholders expect them to do well while also doing the right thing.”
Compared with privately held companies, listed companies are twice as likely (48 percent) to have clearly defined ESG metrics and to link them to C-suite performance.
Partner and Head of People Solutions for Australia at Aon, Simon Kennedy, said while difficult to make the transition to linking metrics depending on where listed or private companies are in the process of their ESG journey and with some markets ahead of others in the region, it is no longer enough to commit to targets that are not tied to either a financial incentive or disincentive.
“The first step is to align ESG targets with business strategies and goals. Companies can retain their existing measures, no matter how simple, and enhance them as they move forward. Ideally, ESG targets need to be as measurable as financial targets, preferably using audited numbers based on established standards,” said Kennedy. Board education also key to integrating ESG
While 61 percent of respondents reported that they involve their entire board in decisions concerning ESG, 41 percent do not have a formal process or training program in place to educate board members about contemporary ESG topics.
“Among survey participants, most companies currently conduct only one or two education sessions on ESG per year for their boards. Whilst directors are expected to be deeply involved in developing and overseeing ESG strategy, training is required to ensure board members are adequately informed and capable of making sound judgements about the ESG risks and opportunities under their governance,” said Kennedy. Green talent becoming a priority
Another key factor that emerged in the report is the issue of green talent, as nearly one-third of surveyed companies plan to introduce or expand ESG roles, with 76 percent of positions being hired at the mid-professional level.
“Companies will need to embark on job redesign and upskilling initiatives and invest in their talent to meet this growing demand, either through external university programs, micro-credentials, sustainability certifications or internally managed employee training. A comprehensive talent strategy is essential to keep businesses competitive, and a robust workforce reskilling program can help build a more resilient workforce, enhancing the potential of existing employees even if external talent pools are shrinking,” said Na. Further key findings from the report include:
- 25 percent of private companies and 50 percent of listed companies have a dedicated ESG team.
- 30 per cent of new initiatives in 2023 involve re-skilling or upskilling the workforce on ESG.
- 61 percent of boards are actively monitoring diversity, equity and inclusion (DE&I).
“In Asia Pacific, companies around the region are taking steps to improve their performance on ESG, either to become more attractive to investors or as an aspirational endeavour unrelated to regulatory requirements. It is not a homogenous market, though countries such as Australia and Singapore are ahead of the curve in terms of ESG maturity,” concluded Na. “To achieve ESG improvement, companies need to learn from best practices across the region and extend their ESG thinking and behaviours beyond the boardroom so that they make better decisions that permeate the entire organisation. Integrating financial incentives and a greater focus on education, together with enabling technologies and analytics, reinforced by converging ESG standards, will ensure companies are not left behind as improved ESG performance gains pace in the region.”
The issuer is solely responsible for the content of this announcement.
About the survey
Aon conducted the ESG survey of senior leaders of both private and publicly listed companies across all industry sectors between October and December 2022. More than 255 companies participated from Australia, India, Singapore, Japan, Malaysia, and China. Read the APAC ESG report here.
Aon plc (NYSE: AON) exists to shape decisions for the better — to protect and enrich the lives of people around the world. Our colleagues provide our clients in over 120 countries and sovereignties with advice and solutions that give them the clarity and confidence to make better decisions to protect and grow their business.
Follow Aon on LinkedIn, Twitter, Facebook and Instagram. Stay up-to-date by visiting the Aon Newsroom and sign up for News Alerts here.
Stakeholder mapping, analysis, engagement and communication needs to be detailed to avoid business losses or even worse, a crisis. How can you do this effectively to prevent failure? ...
Data-driven business decisions have never been as crucial, especially in this era. MGBF leverages off, technology, experience and market presence to aid businesses in making accurate decisions. ...
MGBF provides comprehensive strategic advice and results-focused solutions to solve clients' problems in business-government relations so they can focus on their core business. ...
A critical business challenge is meeting the right decision-makers and potential buyers through the best channel and platform. How will you improve your business competency? ...
MGBF is hosting a networking session with Romania's global analyst, Radu Magdin, in Kuala Lumpur. Join the discussion on strategic shifts and conflict flash points that impact Malaysia’s international facing business.
Expanding on the Malaysian government's efforts to promote the country as a trade and investment destination of choice, MGBF will engage with the many industry leaders who announced multi-billion dollar commitments.
The global trend towards a sustainable future is driven by multiple forces. What does Malaysia have to do to achieve resilience at the corporate level while creating new business opportunities?
Special session: Cyberwarfare Waged on the Corporate Sector - Lessons from the Russia-Ukraine Crisis. Corporations are in a digital arms race that many don't realise. How does this relate to your organisation?
MGBF In The News
The classic knee-jerk reaction is to say, fire the coach, change the leadership of associations, and reduce the funding till they start performing better. This kind of negative reinforcement may work for kindergarten children, but we are dealing with high-performance adults – individuals much further along in their psychological and […]
Since its earliest tea plantations in 1929, Cameron Highlands has grown to become a key player in the agricultural landscape of Malaysia, producing 40 per cent of all vegetables grown. Despite Malaysia shifting its economic focus away from agriculture, the industry remains imperative for food security and the livelihoods of […]
Although at first glance the travel industry and the agricultural sector appear to have nothing in common, they actually share more than meets the eye. The economic benefits of tourism to the agricultural sector can be multiplied several times over. “Tourism brings the end consumers closer to the source, which […]
The Malaysia Global Business Forum (MGBF) recently held a high-level roundtable themed ‘Designing the Future of the Digital Economy’, attended by industry leaders and business associations. The guest of honour was Yang Berhormat Syerleena Abdul Rashid, the Member of Parliament (MP) for Bukit Bendera in Penang. The MP’s Special Session […]
The Malaysia Global Business Forum (MGBF) will be hosting a roundtable on ‘Designing the Future of the Digital Economy’ on 23 February 2023. It is the culmination of the first three MGBF Exclusive Roundtable Series titled ‘The Evolving Threat Matrix in the Digital Economy’ held throughout 2022. According to the […]
The Founding Chairman of the Malaysia Global Business Forum (MGBF), Nordin Abdullah, today spoke on Bernama TV’s leading English talk show, The Brief, hosted by Jessy Chahal, on the topic of a stable political reality and what that means for the Malaysian economy. Nordin said, “The first thing that it […]
More than 1,100 years ago, Muhammad ibn Musa al-Khwarizmi was developing the mathematical formulas that we know today as algorithms which now have become so intertwined with the business fortunes of global media giants and the very fabric of geopolitics. A series of recent high level international reports have revealed […]
KSK Land has been recognised by the Malaysia Global Business Forum (MGBF) for its role in attracting high net-worth individuals to Malaysia post-pandemic. The first challenge in investor attraction is “selling” the country. In the context of Asia, Malaysia is competing with some very established investment destinations. The second […]
Malaysia, in particular Kuala Lumpur, continues to position itself as a regional centre to do business, educate a family and enjoy a global lifestyle. One company, KSK Land, has taken the lead in positioning itself and the city of Kuala Lumpur as a property investment destination for the global citizen […]
The upcoming budget represents an opportunity to build resilience in the critical sectors that will form the backbone of the country’s future-facing economic ambitions. This however needs to be achieved in the context of managing the community sectors most impacted by COVID-19 over the past two years. The Keluarga Malaysia (Malaysian Family) […]
Malaysia Global Business Forum (MGBF) has moved to support the creative economy as the overall economy moves into a recovery phase following the COVID19 pandemic. As a step in the direction of normalcy, the MGBF has agreed to host the art exhibition “I Know You’re Somewhere So Far” by one […]
Congratulations to Datuk Seri Ismail Sabri Yaakob for taking up the mantle of the ninth prime minister of Malaysia. There is nothing normal about the situation; it could not have been scripted but it has kept the spectrum of media, mainstream and social, gripped. The first order of business for […]
In a stirring speech to the nation, President Joseph R. Biden, Jr. stamped his brand of leadership on the presidency, in his first act as the 46th president of the United State of America, it signaled several shifts. Perhaps the weather was foreboding with snow falling before the ceremony that […]
KUALA LUMPUR, 6 July 2022 – As the global economy continues to deal with unprecedented levels of disruption caused by the pandemic and the conflict between Russia and Ukraine, the convergence of energy security and food security issues has become a front-of-mind issue faced by policy makers and consumers alike. […]
KUALA LUMPUR, 23 June 2022 — Malaysia Global Business Forum (MGBF) ties up with scoutAsia to ensure that businesses are equipped with deeper regional insights. The past two years has seen a massive shift in the way businesses are conducted with digitisation, digitalisation and automation continuously being adopted to improve […]
KUALA LUMPUR, 25 May 2022 – The Malaysia Global Business Forum (MGBF)’s exclusive roundtable on ‘Security Concerns in Critical Value Chains’ was held in a hybrid setting yesterday at the Eastin Hotel Kuala Lumpur. The guest of honour was Yang Berbahagia Tan Sri Dato’ Seri Rafidah Aziz, former minister of […]
We live in the age of crisis. At the heart of any crisis is the threat of rapid change. Change too deep or too wide that the current coping mechanisms for an individual, corporation or government are unable to remain resilient. An unwelcome paradigm shift, like the proverbial spider, that […]
The Malaysia Global Business Forum (MGBF) has released a report following the roundtable on ‘Digital Resilience in the Corporate Sector’, which was recently held in Kuala Lumpur. In attendance as guest of honour was Deputy Minister of Communications and Multimedia, Datuk Zahidi Zainul Abidin. The report recommended several critical development […]
Trade and investment delegations will trickle back over the next few months, but the second half of the year should see considerable return of business travellers. It was learnt that over 50 per cent of international business chambers and industry associations surveyed will consider sending exploratory teams to Malaysia during […]