5. Avoid greenwashing the environmental, social and governance (ESG) story
Although ESG reporting is only inching its way onto board agendas in emerging markets, more than one in 10 respondents (12%) see it as a top risk to the long-term survival of their company. One-third (33%) of emerging market respondents say that their company has a policy on either corporate social responsibility (CSR) or ESG. However, our survey shows a gap between what companies say that they have in the way of an ESG policy and how they demonstrate accountability.
Greenwashing is increasingly ineffective in convincing employees, customers and society of an organization’s true ESG performance. “As more Middle East companies see their integrity standards discussed externally by the public, investors and stakeholders, and as social and governance aspects gain attention, companies that fail to adhere to high standards of ethics and integrity in these areas, as well as the environment, will score poorly across all elements of ESG,” says Nader Rahimi, EY MENA Forensic & Integrity Services Leader.