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‘ESG is now BAU’, says BigLaw firm’s report
A new report from a global law firm details leading concerns for Australian business leaders at this critical juncture, as well as their headline ESG priorities.
Jess Feyder
King & Wood Mallesons (KWM) has released its 2022 Directions survey findings, for which it surveyed company directors and senior business clients and found that the chief concern of organisations’ was attracting and retaining the skilled workers needed to navigate post-pandemic uncertainty and opportunities.
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Attracting and retaining skilled labour (79.2 per cent) was clearly identified as the area of greatest opportunity or concern, followed by challenges from wider labour market constraints and skills shortages (52.3 per cent), KWM noted.
The focus on people is a “marked departure” from recent surveys, the firm continued, which have consistently ranked managing IT and cyber risks as a foremost concern, along with maintaining appropriate corporate culture and protecting brand reputation. In 2022, it said, managing IT and cyber risks dropped to the third-ranking concern (51.5 per cent).
Elsewhere, challenges from the geopolitical environment (including war and sanctions) (30.8 per cent) and diversifying sourcing in and shortening supply chains (20.8 per cent) both ranked as issues of significantly less concern — despite the widespread disruptions to production, trade and investment triggered by pandemic-related shutdowns and geopolitical tensions,
Lead author of the report, KWM partner Meredith Paynter said that a “back to basics” human focus was notable.
“We’ve not seen such a clear consensus on one issue before — it is significant and telling — people and teams really are the glue that binds organisations for greater resilience and success,” she said.
“The people focus is also evident in what respondents identified as the best opportunities for growing their organisations following two years of COVID-related restrictions.
“Interestingly, organic growth in existing or adjacent business lines ranked highest (63.3 per cent), closely followed by technology transformation (60.2 per cent) — each of these opportunities require organisational capacity (that is, an appropriately skilled and capable team).”
The survey also asked several ESG-focused questions to address elements that are now considered essential components of modern business strategy and operational performance, meaning that — as KWM put it — “ESG is now BAU”.
The top-ranking key ESG priority is creating and maintaining a diverse and inclusive workforce (55.4 per cent), followed by building/improving sustainability capability (53.6 per cent).
These priorities rank above making and satisfying public commitments to address greenhouse gas emissions (e.g. net zero, carbon neutral, carbon negative) (43.8 per cent), which the firm said reiterates the overarching people focus for businesses in 2022.
