Only a fifth of the UK’s SMEs are aware of what Environmental, Social, and Corporate Governance (ESG) means according to a survey of 1,124 business owners by ID Crypt Global.
The research shows that just 19% are aware of what ESG is, while only 12% are actually implementing ESG practices.
Among those taking action, 73% state that it has improved their company for the better and 87% would like to see ESG practices made more widely available for all companies, of all sizes, across all sectors.
However, the varied scoring methodologies currently utilised within ESG practices is one area that has come under criticism, and 86% of SMEs surveyed would like to see one consistent scoring method introduced across the board.
71% also stated that there should be an independent regulatory body that is responsible for the provision of ESG scores on a global basis, further improving transparency when it comes to ESG practices.
Of those that said do not currently engage in ESG activities, 92% also stated they had no plans of doing so in the future. The primary reason for this was that they felt it provided no real benefit to their business, while many also had a lack of knowledge or awareness around the topic, with the cost involved to obtain a score via a third party also a barrier for most.
Lauren Wilson-Smith, CEO and founder of ID Crypt Global, said: “There remains a number of issues when it comes to ESG implementation for smaller businesses. The cost of obtaining and improving a score is certainly one factor, as well as a lack of prior knowledge on the subject. But there is also a lack of transparency due to the numerous score providers operating within the space. As it stands, ESG is inaccessible for many smaller businesses and more certainly needs to be done to drive home the benefits of ESG for companies of all sizes in all sectors.”
