Stepping up on social issues

CEOs see a growing demand from stakeholders to implement ESG principles in their business strategy. Almost half of the respondents in Ukraine (47 percent) and over two thirds worldwide (67 percent) are talking about the demand from stakeholders (including investors, regulators and customers) for increased ESG accountability and transparency. 30 percent of Ukrainian respondents and 58 percent worldwide characterise this demand as significant and important, noting that the greatest demand and pressure is seen from institutional investors, according to 67 percent of respondents in Ukraine and 52 percent globally.

Investments to ensure sustainable development

To make progress on sustainable development, including climate change and decarbonisation of the economy, executives plan to devote significant capital to becoming more sustainable, with 24 percent of Ukrainian respondents and 30 percent worldwide planning to invest more than 10 percent of their company’s income into sustainable development programmes.

Government role in climate change illustration

Connecting ESG strategy with financial returns

There is great public demand for integrating ESG policies into companies’ business processes. Company executives believe that social and environmental priorities are important, though they are less confident about the relation between ESG programmes and financial performance.

Within high-growth organisations, 52 percent of global executives believe that their ESG programmes will improve financial performance, a stark contrast to a mere 14 percent of Ukrainian executives from high-growth organisations. However, in a wider sample or organisations, the figures align more closely (though are still pessimistic) with 37 percent global executives and 20 percent of Ukrainian respondents seeing financial benefits in ESG programmes.

Almost a quarter (24 percent) of the surveyed executives worldwide say that the implementation of ESG programmes could lead to a decrease in financial results, while just three percent of Ukrainian business leaders agree. 77 percent of Ukrainian managers, meanwhile, consider the impact of ESG implementation to be neutral or to have an insignificant effect on their companies’ financial results. Preparing proper reporting will be essential as investors’ attention to ESG activities is on the rise: 58 percent of global executives and 30 percent in Ukraine face increased ESG reporting requirements from stakeholders; including investors, regulators, and clients.

Unless otherwise indicated, throughout this report, “we”, “KPMG”, “us” and “our” refer to the network of independent member firms operating under the KPMG name and affiliated with KPMG International or to one or more of these firms or to KPMG International.