Companies anticipate direct commercial benefits from embracing sustainability

Environmental, Social and Governance (ESG) targets are increasing. And external pressures to do so are broad based, but firms feel it most from consumers, government, and supply chain partners.

The vast majority of companies expect sustainability performance to boost sales (86%). While a plurality of businesses (41%) expect increased growth of up to 5% over the next year, for a sizeable minority the opportunity is far greater. More than a quarter (28%) expect sustainability to boost growth by between 5% and 10%; and one in six (17%) expect increased growth in excess of 10%.

Larger companies expect the greatest increases, as do companies in South America, the Middle East and North Africa. Firms in these regions also anticipate sustainability will help attract investment.
In terms of sectors, natural resource intensive industries such as agriculture and mining companies see the highest growth benefits. Whereas the automotive sector has the lowest expectations.

More firms have targets than last year

  2019 2020  
Environmental 68% 78% +10%
Social 65% 77% +12%
Governance 48% 46% -2%


86% of companies expect their sales to grow over the next year, from a greater focus on sustainability

Priorities for environmental targets

Energy usage 82%
Recycling of materials 80%
Diversity in all levels 80%
Executive salaries / compensation 80%
Impacts on local communities 79%
Carbon footprint 79%
Net zero emissions in own operations across supply chain 76%
Water use 75%
Net zero emissions in own operations 75%
Diversity at board level 75%
Adopting UN Sustainable Development Goals Framework 72%
Employee travel / air miles 72%
Gender pay gap 72%

External pressures are growing. Consumers are the strongest driver for automotive and construction firms to enhance sustainability, whereas government action influences natural resource-intensive businesses in the agricultural, oil and mining sectors. But while governments may exert pressure, companies are also looking to the state for support. Around two in five firms (37%) report that government incentives would support their sustainability efforts.

Three in four companies have set sustainability targets. One-third favour annual targets (35%), 27% are setting a target for 2025, and 12% for 2030.6 There is a marked increase in the use of targets relating to environmental and social outcomes since 2019, but targets for governance issues are unchanged and far less prevalent.

Companies expect the benefits of improved sustainability performance to extend beyond the bottom line. Expected benefits include employee wellbeing (37%) and recruiting talent (28%), with attracting investment (30%) another sign of the financial benefits that accrue alongside enhancing corporate reputation (32%).

6 The proportions mentioned here are indicative averages across a pre-defined set of commonly accepted ESG targets.

Consumers are digging deeper and spending more time analysing whether a product’s claims are actually truthful, and if not they are harder on brands than in the past.

NielsenIQ, a consumer intelligence business based in Singapore

Target timings and focus*

Have set a target by 2050 4%
Have set a target by 2030 14%
Have set a target by 2025 27%
Have annual targets in place 30%
No plans 17%
Does not apply 7%

Winning strategies

Companies that identify as thriving see the greatest opportunities from improving sustainability performance. A majority of businesses recognise it will create short-term commercial opportunities, boosting growth.

Today’s lower borrowing costs create an opportunity for ESG investments which will pay off tomorrow. And sustainable financing solutions, cited by 30% firms as an enabler, can help unlock these opportunities.

* Selected responses

The Navigator survey is conducted on behalf of HSBC by Kantar. It is compiled from responses by decision-makers at 10,368 businesses, ranging from small and mid-market firms to large corporations, across a broad range of sectors.

The respondents hold influence over their company’s strategic direction and represent a broad range of roles: including c-suite, finance, procurement, sales and marketing.

A total of 39 markets were surveyed between 11 September and 7 October 2020.

Europe: Belgium, France, Germany, Greece, Ireland, Italy, Netherlands, Poland, Russia, Spain, Sweden, Switzerland, UK

Asia Pacific: Australia, Bangladesh, mainland China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore, South Korea, Sri Lanka, Taiwan, Thailand, Vietnam

Middle East & North Africa: Egypt, Saudi Arabia, Turkey, UAE

North America: Canada, Mexico, USA

South America: Argentina, Brazil

Rest of Africa: South Africa

Results have been weighted to be representative of markets’ international trade volume (World Trade Organization data for 2017-2018).

For further information about the research please contact:

Kate Woodyatt
HSBC Global Communications

Note: There may be a slight discrepancy between the sum of individual items and the total as shown in the tables due to rounding.

Whilst every effort has been made in the preparation of this report to ensure accuracy of the statistical and other content, the publishers and data suppliers cannot accept liability in respect of errors or omissions or for any losses or consequential losses arising from such errors or omissions. The information provided in this report is not intended as investment advice and investors should seek professional advice before making any investment decisions.