EY Corporate Investor Survey 2024 Released
Foreks - The international consulting, audit, assurance, strategy, corporate finance and tax services company EY has published its Corporate Investor Survey 2024 report, which is attended by 350 decision-makers from various investment firms such as asset managers, insurance, and pension funds, for the 11th time this year. The research examines the role of sustainability strategies in investment decisions and how these reports are utilized in investment choices. The findings reveal a dissonance between investors' discourse on ESG and their actions.
EY's research offers companies a valuable roadmap for aligning sustainability strategies with investor decisions. The report, which highlights significant results by exploring approaches to ESG investments, indicates that 88% of participants state they benefited more from ESG-related information for their companies compared to the previous year. This finding reflects growth in corporate reporting; however, it also shows that ESG issues still do not hold sufficient priority in decision-making processes.
Greenwashing poses a major threat that undermines investor confidence. 85% of investors participating in the research indicate that greenwashing and misleading sustainability performance claims are a bigger issue than five years ago. Conversely, 93% of survey participants express confidence that companies will successfully achieve their carbon reduction and sustainability goals. However, EY’s 2024 Global Corporate Reporting Survey shows that only 47% of finance leaders believe their organizations will timely meet their sustainability priorities and targets. This dissonance reveals that companies still face serious challenges in achieving sustainability goals. It is critical for investors to demand companies publish transition plans and clarify their financial commitments to climate-related initiatives.
Non-financial reporting standards are deemed insufficient. The research also points out that 36% of investors find companies' progress in non-financial reporting inadequate. While 80% of participants believe these reports should be clearer and more meaningful, allowing for comparison with other corporate reports and highlighting discrepancies, 64% advocate for sustainability statements to be subject to independent audits.
Investors focusing on short-term gains do not adequately concentrate on long-term impacts. It appears that investors are more comfortable looking to the near future in their decision-making processes. 57% of participants indicate they can assess the short-term effects of ESG, whereas only 25% believe they possess the capability to analyze long-term effects and performance. The results reveal both contradictions and significant opportunities in investors' approaches to ESG.
Regarding the EY Corporate Investor Survey, Ece Sevin, EY Turkey's Climate Change and Sustainability Services Leader, stated: “The preference of investors between short-term returns and long-term ESG benefits clearly shows that sustainability strategies need to be integrated more deeply into investment decisions. Many investors struggle to effectively translate their correct steps regarding climate change into actions and completions. This research emphasizes that companies must strengthen ESG factors not only through discourse but also through concrete actions. At EY, we believe that sustainability principles should be an integral part of long-term value creation strategies, and we continue to guide investors to integrate ESG factors into their business models, not just investment decisions. If approached correctly, there could be an increase in investments in climate change projects, which would provide the necessary support for climate finance while creating significant and substantial waves in the fight against climate change.”