Almost a third of mid-market businesses say they face a high risk of losing business if they fail to act on ESG, according to new research, which also ranks ESG above Brexit and COVID in priority.

Figures from the recent BDO survey suggests that ESG considerations are moving up the agenda for mid-market businesses. Indeed, when asked about their top business priorities, 38 per cent of business leaders ranked meeting ESG criteria as their highest priority. This was higher than those citing adapting to post-Brexit challenges (36 per cent) and recovery from COVID-19 (25 per cent).

Matthew White, BDO senior partner and chair of the firm’s ESG Executive Committee, said: “While the pressure to improve ESG performance has to date focused on the large polluters, big financial institutions and publicly listed companies, we are now seeing a trickle-down effect with ESG now firmly on the board agenda at mid-market level.”

ICAEW’s Director of Technical Thought Leadership, Richard Spencer, believes that ESG has shot up in priority as a result of the rise in natural disasters. “COVID-19, fires, floods, famine, pestilence and hurricanes on an almost biblical scale is part of the new normal,” said Spencer. “There is no going back to the cosy world of concern-at-a-distance and big words without action. The IPCC report at the beginning of August made abundantly clear there will be more of this, more often and at greater scale.”

When asked to think ahead to the next five years, 31 per cent of respondents said there was a ‘high’ or ‘very high’ risk of losing business or losing the eligibility to bid for new business if they failed to meet acceptable ESG standards. However, 36 per cent said the risk was ‘low’ and 6 per cent judged there was no risk at all.

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