(Credit: Pixabay)Focusing on and publicizing ESG goals and investments are currently widespread corporate initiatives, but according to a CNBC survey, financial executives aren’t as supportive of those plans.
The survey shows chief financial officers, nearly half from Fortune 500 companies, are especially against the Securities and Exchange Commission’s proposed emissions and climate disclosures. A quarter of the respondents are for the SEC’s measures, but 35% say they strongly oppose it.
The executives also are unsure of the quality of ESG data and show support for some state-level financial regulations that are beginning to surface that restrict what asset managers with ESG goals can work on.
The SEC proposed new rules in March of this year for companies to make disclosures on environmental and climate topics. The disclosures would include information on Scope 1, 2, and 3 emissions.
The rules have yet to be formally put into place but have seen a good deal of pushback from states and industries. Several groups of state attorneys general have raised concerns about the disclosures, and the Missouri Farm Bureau is among businesses and organizations that have publicly denounced the proposal.
The CNBC survey comes as investment, and transparency, in ESG efforts continues to be a corporate talking point. A report by NAVEX earlier this year found that 46% of 1,250 executives and managers surveyed will increase their organization’s focus on ESG this year. Of the responses, 83% say ESG efforts have an impact on their company’s brand.
Most respondents in a Deloitte survey of 300 senior finance, legal, and sustainability leaders found that companies are working toward more reliable data in ESG reporting. A separate report from Deloitte found nearly 80% of more than 2,000 executives see climate impacts as a significant challenge to businesses.
Yet a lack of communication and engagement by executives, ineffective use of data, and a lack of cross-company and industry collaboration have held back progress, according to research by Oxford Economics and SAP.
Many of the CFOs surveyed by CNBC also say they also don’t trust ESG data and investment information. According to financial services firm Refinitiv Lipper, ESG funds received more than $650 billion in investments last year, a record. They make up 10% of total worldwide fund assets.
A 2021 report from New York University showed ESG investment overall was having a positive impact on businesses, with 58% of more than 1,000 case and research studies from 2015-2020 showing a positive relationship between ESG and financial performance. The report showed that 59% of investment studies had similar or better results compared with traditional investment methods.
Some members of the Senate recently sent letters to ratings firms asking them how they assign ESG ratings, which include sustainability and emissions progress, to companies, according to a CNBC report.
According to the CNBC survey, individual state pushback against ESG measures in states including West Virginia, Florida, and Texas also drew some support from CFOs. CNBC says those states are barring asset managers considered ESG friendly from managing state funds and bidding on state business contracts.
The survey shows that 45% of the CFOs support states banning investment managers that use ESG factors from state pension fund business, with a quarter opposing such a move. Only 5% say they are strongly opposed to those measures.
The CNBC CFO Council Survey was conducted in September 2022. Twenty-one CFOs, of which 44% are from Fortune 500 companies, responded.
