Are CEOs still prioritising ESG?

A new survey by KPMG has raised the question of whether CEOs are still prioritising environmental, social and governance issues as they face a recession. The survey of 1,325 chief executives has found that 86% believe that there will be a recession in 2023, with three-quarters expecting disruption to company growth for three years.

The good news: 45% said that progress on ESG improves corporate financial performance, supporting the business case for increasing ambitions and efforts in challenging economic times. However, in practice, one in three said that their company had already paused or reconsidered programmes for the coming year, and a further 50% expected this within six months. It is likely that initiatives around supply chain resilience will go ahead, as half of those surveyed said that their company would diversify supply chains in the next six months in response to geopolitical challenges. 

Nestlé has announced plans to stop sourcing from subsidiaries of palm oil company Astra Agro Lestari (or AAL) by the end of 2022. The major Indonesian producer has been accused by environmental groups of land and human-rights abuses, and has been on Nestle’s “grievance” list for several months. While it has not been directly linked, commodities watchers have speculated that this move may be a preview of the effects of planned EU due diligence regulation, over the coming years. 

Nestlé’s coffee brand Nescafé has launched a 2030 plan. The extensive strategy will involve the investment of over 1bn Swiss francs by the end of the decade to expand the brand’s sustainability work in tackling climate change and addressing social and economic challenges in its value chains. Nescafé will be continuing its work with coffee farmers to help them transition to regenerative agriculture, while accelerating its previous decade of work. (Disclosure: Innovation Forum was pleased to work with Nescafé on the plan’s launch.) 

Efficient waste management could cut emissions from the waste sector by more than 80%, a new report by the campaign group Global Alliance for Incinerator Alternatives, has found. Models suggest that 1.4bn tonnes of greenhouse gas emissions could be cut annually through the broad adoption of composting, recycling and production cuts. 

Such measures could have a ripple effect, reducing emissions from other sectors including mining farming, manufacturing and agriculture. The report also notes that improved waste management could enable net-negative emissions in global cities including Seoul, and Sao Paulo, as early as 2030.

UK supermarket Tesco has unveiled plans to halve food waste in its own operations by 2025 – stating that “tackling food waste has never been more urgent” amongst the unprecedented challenges facing businesses and consumers. Tesco’s plans to accelerate its work in the area include investing in partnerships with food surplus redistribution programmes FareShare and Olio, and diverting more surplus unfit for human consumption to suppliers, for use as animal feed. 

Tesco will also be aligning executive pay performance targets to key sustainability measures including food waste – meaning that 25% of the performance share that executive directors receive will depend on progress on factors including food waste reduction, gender and ethnicity representation, and carbon reduction in its own operations. Tesco is one of the first UK food retailers to make such a move.