Awareness of ESG’s importance grows across Asia Pacific
While more organisations in Asia Pacific are recognising the importance of recognising environmental, social and governance (ESG) issues, many are yet to align ESG measures with organisational goals or including them as key performance indicators (KPIs).
Specifically, 58% of organisations surveyed part of Aon’s 2023 Asia Pacific Corporate Governance and ESG Survey Results said ESG was critical to their long-term success. However, only 29% have included ESG-related goals and KPIs for their C-suite, with most respondent saying they are still in the early stages of using ESG metrics and developing their ESG profile.
To help integrate and expand ESG initiatives, Aon recommended incorporating financial incentives with ESG efforts to align with an organisation’s overall strategy and compensation plans. Strengthening the education of an organisation’s board about contemporary ESG topics is also key, with about two-fifths of the companies surveyed (41%) reported not having a formal process or training programme in place to educate board members about current ESG topics and issues.
Simon Kennedy, Partner and Head of People Solutions for Australia, Aon, said, “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.”
Encouragingly, nearly one-third of the surveyed companies plan to introduce or expand ESG roles, with 76% of these positions at mid-professional level.
READ: Accelerating sustainability: ESG and the roles of the CHRO
Boon Chong Na, Advisory Partner and Corporate Governance and ESG Lead, Human Capital Solutions for Asia Pacific, Aon, concluded, “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.”