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Oct 04, 2022

Covid-19 increases importance of ESG to IROs

Belief strongest in Asia but North Americans disagree

IR Magazine research shows a clear majority of IROs view an increase in the importance of ESG as a result of the Covid-19 pandemic, while opinion is more divided among investors.

The latest global study by IR Magazine into the effects of the Covid-19 pandemic shows 56 percent of IROs agreeing with the view that Covid-19 has increased the importance of ESG issues, with 23 percent of IROs in strong agreement. At the same time, just 16 percent actively disagree with this view.

IR Magazine’s Covid-19 Update 2022 is the third annual study into the impact of the pandemic on IR and the working lives of both IROs and investors. The first study was conducted in May 2020 in the early days of global lockdown, while the second was conducted a year later at the height of the pandemic.

In each study, both IROs and investors were asked how they thought Covid-19 would affect ESG issues. In 2020, at the onset of the pandemic, IROs were asked to predict whether they thought Covid-19 would lead to an increase in the importance of ESG, and 56 percent believed it would.

A year later, in the middle of the pandemic, just under two thirds of IROs perceived an increase in ESG importance as a result of Covid-19. So while there is a drop in agreement this year from views at the pandemic’s height, IROs’ current experience of the increased importance of ESG matches their predictions at the start of the pandemic.

Asia versus North America

The views of investors, however, are more mixed. Globally, four in 10 investors agree Covid-19 has led to an increase in the importance of ESG, while 31 percent disagree. This represents a net difference of just 9 percentage points in the number of investors agreeing with this statement and those disagreeing – considerably less than the 40 percentage-point difference among IROs.

In 2021, just over twice as many investors agreed as disagreed that ESG had increased importance, so there is a notable drop this year from the views of investors at the pandemic’s height. As with IROs, however, the views of investors on Covid-19’s impact on ESG issues as we come out of the pandemic broadly match the expectations they had at the beginning, when 37 percent predicted an increase in ESG importance.

Overall, belief that the experience of Covid-19 has led to an increase in importance for ESG issues is strongest in Asia, where just under three quarters of survey respondents agree with this view, while just 8 percent disagree. This is in stark contrast to North America, where there is marginally more active disagreement than agreement among respondents that ESG’s importance has increased as a result of Covid-19.

IR Magazine’s Covid-19 Update 2022 is available to Essentials subscribers. Fieldwork for this study took place in May and June 2022. Click to read Sample: Covid-19 Update 2022