ESG Statistics Report for 2024: The Impact on Business and Investment

Environmental, social, and governance (ESG) is a set of principles that help businesses showcase commitments beyond profit. 

It’s essentially a way to measure a company’s sustainable and ethical credentials, geared toward supporting the planet, being a better employer, and making transparent decisions.

Over the last few years, ESG has become a standardized benchmark for many companies, and taking it seriously can pay off financially and enhance brand reputation — plus, consumers increasingly want to support brands that value these practices.

ESG isn’t going anywhere — paying attention to it is fast becoming crucial to any successful business framework. 

What's on this page?

Key ESG statistics

• ESG-related institutional investments are expected to value $33.9 trillion by 2026
• 90% of S&P 500 companies (the 500 biggest US companies) and 70% of Russell 1000 companies (a group of the 1000 most influential US businesses based on market value) publish reports on ESG data 
• Around 83% of consumers believe companies are responsible for shaping ESG best practices
• Four out of five investors planned to increase ESG investments in the next five years 
• 85% of investors think ESG investments build resilience and unlock better financial returns 
• However, 75% of companies believe they’re not ready for regulation or ESG data assurance 

The growth of ESG investment globally

Over the last 30 years, socially responsible investing has grown exponentially, which is pretty exciting. 

The first ESG index can be traced back to the launch of the Domini 400 Social Index (Domini 400) in 1990, which signaled a clear interest in ESG-friendly investing. 

Since then, more and more investors have started to put capital into organizations that prioritize environmental, social, and governance factors. 

Fast-forward three decades, and there’s now a thriving ESG fund landscape that captured a record $51.1 billion of net new money in 2020 alone. 

According to BBVA, the total market for ESG investments totaled $2.5 trillion in 2022 and continues to grow. This shows that despite geopolitical uncertainties, economic challenges, and even the pandemic, investors see the long-term value of ESG investing.  

It’s also worth noting Europe's prominence in this light. With around 83% of the global market share of ESG funds, Europe is miles ahead of the US and Asia in the sustainable fund segment. 

While Europe currently dominates the ESG investment landscape, more promising figures may emerge from other parts of the world in the future, especially as younger investors become involved. 

According to Morgan Stanley, 99% of US millennials are interested in sustainable investing. This surge in demand may unlock more diversity in sustainable markets, fuelling more innovation worldwide. 

The emergence of sustainable regulations, standards, disclosures, and data will unlock more information and legitimacy within the ESG market, potentially adding to this growth.  

How ESG commitments attract different consumers 

Brands and businesses that prioritize and communicate their ESG commitments are not only poised to benefit from increased institutional investment but also consumer support. 

Conscious consumerism, where shoppers consciously make purchasing decisions with ESG in mind, is rising across every generation. 

Packaging, product longevity, and a brand’s carbon footprint are among the most significant areas of interest for conscious consumers. More than 70% of shoppers agreed they’d be willing to pay a little more for brands that align with these values. 

There are many ways to tap into this consumer cohort, but ESG reporting and clear communication are some of the most impactful. 

By making sure your brand is on top of its ESG data, you avoid the risk of greenwashing pitfalls while establishing yourself as a company that genuinely cares — something that shoppers will increasingly look for. 

How investors see ESG reporting

Companies that demonstrate strong ESG scores have usually fared better financially than those that didn’t prioritize those factors. 

Investors are increasingly paying attention to this, as it also crucially points to long-term growth. According to PWC's Global Investor Survey 2023, ESG outcomes and regulatory risks were among investors' top priorities. 

McKinsey also found that 80% of investors look at reporting to assess how ESG affects cash flows, and the majority would pay a premium toward businesses that show a clear connection between ESG and financial performance. 

More and more companies are reporting on their ESG commitments to align with regulatory requirements while attracting customers and investors. 

But there are also a few caveats. 

Despite mounting interest, around 87% of investors said in the PWC survey they suspected corporate disclosures contained some greenwashing, where brands make misleading claims about their sustainability credentials. This has led to fines worth millions of dollars as regulators try to clamp down on this practice. 

Various ESG frameworks created by different organizations, such as the International Sustainability Standards Board (ISSB), make ESG reporting even more complex and nuanced. 

Investors need more coherence on greenwashing risks and clear reporting frameworks that offer global accountability — after all, climate change is a global problem rather than a localized one. 

Transparency could be further enhanced through external assurance, where an independent body evaluates the sustainability data that brands release. This will probably become a common way for brands to back up their ESG claims in the next few years. 

Pros and cons of ESG

CleanHub is a huge supporter of ESG, and many brands use our data points as part of their reporting progress. But there are two sides to every coin.

ESG adoption challenges 

Around 49% of US investors said the biggest issue they faced regarding ESG was concerns over financial performance. 

The report doesn’t specify whether this deterrence actually stopped investors from making ESG-driven investments, but it raises an interesting point. It suggests that, even though most reports outline long-term benefits, there’s little appetite for risk. 

Businesses themselves appear to face challenges when it comes to ESG adoption, such as costs, regulation, and reporting, that can play into investor fears. 

Rather than see this as a stalemate, it points to the need for more collaboration between businesses and investors to collectively inspire action across the board. 

What the future for ESG holds 

According to Capital Group’s 2023 ESG study, “investors are becoming proactive.” The report explained that 40% of investors are now undertaking proprietary ESG analysis and scoring, while a further 37% are expanding in-house ESG expertise. 

Despite challenges, the future of ESG investment looks promising. Investors are increasingly looking beyond standard reporting and creating their own methodology to understand ESG performance. 

The fact that investors are also developing in-house expertise means these teams recognize the complexity of ESG and the need for specialist focus on this area, which is also good news.

While predicting the future outlook for ESG isn't necessarily clear-cut, collaboration between brands and investors will be essential. 

By working together, brands and investors can set clear expectations about future reporting developments and align their strategies to achieve common goals. 

If anything, an enhanced exchange of ideas can improve innovation across ESG practices at a time when it's becoming increasingly crucial to our world. 

Advice on how to implement ESG strategy effectively

Implementing an effective ESG strategy certainly takes time, but the long-term benefits will likely outweigh any short-term risks or financial challenges. For brands, the best way to kickstart this journey is by: 

1. Conducting assessments on existing performance data
2. Setting up measurable sustainability goals like cutting plastic consumption and reducing energy usage
3. Working on an ESG roadmap that mirrors a realistic timeframe
4. Leveraging technology to report ESG data to relevant stakeholders 

Want to learn more? Check out our comprehensive guide on Everything You Need to Know About ESG Strategy.

Summary 

Despite some challenges in ESG-related investing, most reports suggest this is a growing market segment. 

For business leaders, focusing on getting your ESG strategy right is a great way to attract more investments down the line. 

While we’re just one part of the puzzle, partnering with an external organization like CleanHub can speed up this process. 

Our real-time tracking of plastic waste collections on your behalf offers tangible data points in a clear format that can be shared with investors to unlock trust and transparency. 

Are you ready to enhance your brand’s ESG strategy? Connect with our experts today to learn how our reporting tools can help improve your ESG goals.