EY Corporate Investor Survey 2024 Released
Forex - Sustainability principles are an integral part of long-term value creation strategies. According to EY’s Corporate Investor Survey report, 92% of investors express that they will not sacrifice short-term returns for potential gains from long-term ESG (Environmental, Social, and Governance) investments.
The international consultancy, auditing, assurance, strategy, corporate finance, and tax services company EY has published the 2024 Corporate Investor Survey report, which marks the 11th edition of this study. It involved 350 decision-makers from various investment firms, including asset managers, insurance companies, and pension funds. The research investigates the role of sustainability strategies in investment decisions and how these reports are utilized in those decisions. The results reveal a disconnect between investors' ESG rhetoric and their actions.
EY's research provides valuable roadmaps for companies to align sustainability strategies with investment decisions. The report highlights significant findings, with 88% of respondents indicating they utilized ESG-related information more effectively last year. This outcome, while reflecting growth in corporate reporting, also shows that ESG issues have not yet attained adequate priority in decision-making processes.
Greenwashing poses a significant threat that undermines investor confidence. 85% of investors participating in the study report that greenwashing and misleading sustainability performance claims are a larger problem today than five years ago. Conversely, 93% of surveyed investors express confidence that companies will successfully achieve their carbon reduction and sustainability targets. However, EY’s 2024 Global Corporate Reporting Survey indicates that only 47% of finance leaders believe their organizations will meet sustainability priorities and targets in a timely manner. This disconnect underscores the serious challenges companies face in reaching their sustainability goals. It is critical for investors to demand companies publish transition plans and disclose financial commitments to climate-related initiatives.
Non-financial reporting standards are proving inadequate. The study notes that 36% of investors find companies' progress in non-financial reporting unsatisfactory. 80% of respondents believe these reports should be clearer and more meaningful, comparable with other company reports, and highlight discrepancies. Moreover, 64% argue that sustainability statements should be subject to independent auditing.
Investors focusing on short-term gains are not adequately addressing long-term impacts. It appears that investors are more comfortable looking towards the near future in their decision-making processes. While 57% of participants claim they can assess ESG's short-term impacts, only 25% assert they have the tools to analyze long-term effects and performance. The findings suggest there are both contradictions and significant opportunities within investors' approaches to ESG.
Regarding the EY Corporate Investor Survey, Ece Sevin, EY Turkey’s Climate Change and Sustainability Services Leader, remarked: “The choice between short-term returns and long-term ESG benefits clearly indicates the need for deeper integration of sustainability strategies into investment decisions. Many investors are taking appropriate steps concerning climate change but are not sufficiently successful in executing and completing these actions. This research emphasizes that companies need to reinforce ESG factors not just through rhetoric but with tangible actions. At EY, we believe that sustainability principles should be an integral part of long-term value creation strategies, and we continue to guide investors to integrate ESG factors not only into investment decisions but also into their business models. If approached correctly, there could be an increase in investments in climate change projects, providing essential support for climate financing and creating significant waves in the fight against climate change.”