Emilie O’Neill

Cyber Security emerged as the pivotal ESG theme in the 2022 Perennial Better Future Survey, while greenhouse gas (GHG) emissions and diversity still command strong corporate attention. ESG is still front and centre for ASX listed corporates with 78% of respondents indicating that their business strategy specifically references ESG and Sustainability.

The survey, encompassing 55 ASX-listed companies from a cross section of market cap sizes and industry sectors, revealed strong progress on ESG initiatives. This was despite a challenging macro environment, including tighter monetary policy, inflationary pressures and rising energy prices.   

Co-Head of ESG at the Perennial Better Future Trust, Emilie O’Neill, says: “We have seen ESG priorities move around from year to year, and generally Greenhouse Gas (GHG) Emissions, Diversity, Governance and Modern Slavery are considered the most important to ASX-listed corporates. However, in 2022, Cyber Security emerged as the most important theme.”

The emergence of Cyber Security, up from fourth position in 2021 and consistent across larger and smaller companies, comes as no surprise given the raft of recent cyber-attacks. Many reported concerns in this area, including reputational risks, fines and regulatory attention, customer loss and litigation.  

Damian Cottier, Co-Head of ESG and Portfolio Manager on the Perennial Better Future Trust added: “The survey seeks to gaze into the collective mind of corporate Australia to understand how deeply it is concerned with ESG and Sustainability. 

We had a really broad range of companies participate – from the major banks to microcap stocks.  The outcomes are fascinating on a whole range of issues, and it is intriguing to see how thinking has changed in each of the four years since the survey was first conducted.”

The survey covers a wide range of areas including:

• Who is responsible for ESG and how are companies resourced to grapple with ESG and sustainability issues?
• The extent to which ESG and sustainability outcomes are embedded in corporate remuneration.
• What are companies measuring and targeting in relation to greenhouse gases and other ESG-related metrics?
• How companies engage with investors on ESG and do they think it is worthwhile?
• How are companies thinking about Reconciliation?
• What are companies doing to address Modern Slavery risks?
• How are companies thinking about gender diversity and the inhibitors to greater diversity?

For instance, although gender diversity remains a critical ESG issue, achieving parity is still proving difficult for corporate Australia.  

“Industry difficulties in attracting gender diverse talent pools was the biggest inhibitor to achieving a gender diverse workplace in 2022, consistent with prior years. Competition for top female talent remained in second position and intensified in 2022. Lack of university graduates remained stable,” O’Neill said.  

Another interesting area of focus was on Reconciliation. Our survey found that although only 24% of companies surveyed had launched a Reconciliation Action Plan (RAP), an additional 25% were planning to in the next 18 months. The Perennial Better Future team has made this an engagement area of focus.

We were also pleased with the sustainability progress of smaller companies. When asked whether they have experienced positive business outcomes as a result of focussing on ESG & Sustainability 78% of smaller companies agreed which was a higher percentage than larger companies. Cottier commented “This is encouraging and suggests smaller companies are seeing the importance of improving ESG performance where smaller companies have historically lagged.”

Read the report.

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