To meet the growing expectations of investors and customers, as well as comply with regulation, organizations in Asia-Pacific will need to pivot to more sustainable strategies for the long term. To achieve that, they’ll need to hire talent with ESG expertise, including the ability to develop valuation models that capture the tangible and non-tangible elements of ESG value. They’ll also need access to a pipeline of suitable talent.
Social factors matter too
There’s more to ESG than the environment. The 2021 EY Global Institutional Investor Survey found that the two most important factors for Asia-Pacific investors when evaluating a company on social issues are DE&I and consumer satisfaction.
For example, it’s especially important that organizations in Asia-Pacific and their suppliers are transparent about their operations and workplace practices, among other factors. At EY, we’ve seen a significant change in the attitudes of consumers, which will affect their future behavior, buying decisions and preferences. The EY Future Consumer Index recently showed that 43% of global consumers want to buy from businesses that benefit society, even if it costs more to do so.
Asia-Pacific organizations that fail to respond to these shifts may come under heightened scrutiny from customers and investors. They may also find it harder to attract and keep more purpose-driven Gen Z talent. But geopolitical alliances can sometimes be at odds with the changes they need to make.
Encouragingly, ESG is the number one priority for many boards in Asia-Pacific. Having recognized its importance, their task now is to help management meet the expectations of stakeholders at the necessary pace and scale. That includes finding and keeping the right talent and deciding where to operate (and with whom).