The Sanlam ESG Barometer 2023 contains a couple of interesting insights about how South African corporates are pursuing projects related to environmental, social and governance issues (ESG).
There has been a debate about whether ESG initiatives will attract investment because they might boost company profitability. It is interesting to see that only 37% of respondents expect their ESG investment will yield returns that exceed their cost of capital.
Of course, companies may also pursue ESG projects even if they do not directly boost the profitability of the company. For example, they may wish to invest to create positive social or sustainability impacts – this is often the purpose of corporate social investment or corporate social responsibility activities. The survey suggests that 40% of companies pursue a ESG strategy primarily to have a positive impact on society, with the same proportion doing so to attract investment.