How can businesses unlock significant operational and financial value, boost performance and increase resilience? 海角视频鈥檚 latest global research reveals a compelling link between mature ESG strategies and improved business outcomes for UK businesses 鈥� demonstrating that management of environmental, social and governance risks and opportunities is a platform for innovation and competitive advantage.
Reframing ESG
In a complex landscape, activities to boost resilience and tackle risk are critical for successful business leaders. Our research shows that whether framed as 鈥榬isk management鈥�, 鈥榮ustainability鈥�, 鈥楨SG鈥� or simply good business, the opportunity is the same:鈥痶o boost performance and resilience by addressing complex challenges and opportunities.
The data from our research demonstrates that reframing the management of built assets as a platform for innovation and resilience can unlock significant value, allowing built environment businesses to remain competitive, avoid stranded assets and attract investment.
鈥淏usinesses embracing ESG and planning for their built assets with these risks in mind are creating products and portfolios that are better designed, fit for the future and have higher market value.鈥�
鈥� Duncan Price, partner and global sustainability/climate lead
Filling the business performance evidence gap
海角视频 surveyed senior UK executives across investment firms, real estate managers and corporate real estate departments to uncover how effective management of interconnected environmental, social and economic risks can be leveraged to enhance business resilience, create value and improve long-term business performance.
Our findings provide a solid evidence base for leaders to deliver resilience, create value and drive enhanced business results as they manage interconnected risks across their business.
Key findings
of UK respondents are developing an ESG strategy, have or are actively integrating ESG into their organisation鈥檚 core strategy.
of UK respondents say that ESG positively impacts their financial performance.
of these senior executives, over 46% reported an increase of over 11% and a further 42% reported a 5鈥�10% increase.
of UK respondents say that climate risk and the related insurability and cost of insurance is a rising concern for the near future.
MATURITY
54% of UK respondents are either developing an ESG strategy or actively working to integrate ESG into their broader strategy, while 27% say they have already embedded ESG into their organisations鈥� core strategies (total: 81%). This is line with the global picture of 82% representing this degree of maturity: this aligns with the UK鈥檚 relatively advanced ESG regulatory environment and investor expectations.
FINANCIAL IMPACT
89% of senior UK executives in our research say that ESG has a positive impact on financial performance. This is higher than the average financial uplift we saw globally (79%). This is an encouraging metric, demonstrating that UK businesses can see beyond compliance and suggesting that ESG can be harnessed as a tool for enhanced financial impact, reinforcing the business case for deeper and wider integration.
SIZE OF THE PRIZE
What is the size of the potential prize on offer? Of the senior UK executives who say they have experienced a positive financial impact from ESG, 46% reported an increase in their financial performance of more than 11%, and a further 42% reported a 5鈥�10% increase. This financial boost is reported as higher in the UK than globally (where 40% reported a boost of more than 11%). The data reveals a compelling financial opportunity: in an ever increasingly volatile and complex landscape, UK businesses should grasp it for improved bottom-line returns and successes.
EVOLVING RISK PROFILES
81% say that climate risk and the related insurability and cost of insurance will be a rising concern for their business over the next three years. UK respondents differ significantly from global respondents, who reported this number as 68%. Increases in frequency and severity of climate events 鈥� recording breaking heat in 2022, instances of drought and widespread flooding 鈥� highlight the financial and operational risks of climate change. And wider market influences (regulatory pressure, policy, institutional influences, UK business culture) means that building in resilience against these risks is now critical for success.
Three core motivations
Our global research reveals that businesses across the built environment are consistently motivated by three core factors:
- Meeting increasing regulations and regulatory scrutiny
- Attracting investment
- Increasing long-term value
These motivations are not just theoretical 鈥� they are actively shaping decision-making across the UK.
ESG strategies are often shaped by local market dynamics. The UK is slightly further ahead on the regulation metric than globally (UK: 49% vs global: 46%): the comprehensive ESG regulatory landscape (e.g. UK Social Value Act, Modern Slavery Act 2015) and strong climate focus underpinned by the UK Climate Change Act 2008 may explain this.
Investor demand is a universal driver (UK: 43% vs global: 45%)…
as is increase long-term value and shareholder return (UK: 39% vs global: 40%).
The essential factors for success
What is considered most important in driving success? Globally through the research we identified that that will unlock performance.
72% of UK respondents indicated the importance of measuring ESG performance at the portfolio or fund level (compared to 77% globally, indicating an opportunity for UK businesses to enhance portfolio-wide ESG analytics).
At the asset level, this figure in the UK was 76%, reflecting how critical it is to integrate ESG metrics into operational practices. This was reported as higher in the UK (the global figure is 73%). UK firms seem more focused on individual assets performance.
Additionally, 74% of UK respondents confirmed they had built a solid track record of ESG-focused investments, underscoring a deepening commitment to sustainable strategies. The difference here with the global picture is minimal (75% globally). ESG focused investments is a universal driver.
Accelerating performance
: four strategies that our leader group (top quartile of global respondents) valued significantly more than everyone else.
In the UK, a large majority reported the importance across these critical areas:
ESG leaders
UK respondents
A strong business case for action (70%)
Material, achievable targets with a plan for execution (75%)
Viewing and practicing ESG as a catalyst for innovation and growth (69%)
Skills and capacity to drive ESG projects and programs (76%).
These figures are higher than the global view, indicating that UK firms are well positioned to grasp these accelerators to further drive success. This positioning is reinforced by the UK鈥檚 wider industrial strategy and focus on growth in green jobs.
Tackling these essentials and accelerators together means businesses will unlock enhanced performance (鈥榩erform鈥�) and drive business transformation (鈥榯ransform鈥�).鈥疉s ESG becomes more integrated, its impact grows, creating a self-reinforcing cycle of reinvestment, innovation and growth.
ESG is no longer optional, but a strategic imperative
The ESG landscape varies across countries and regions, shaped by differing regulatory frameworks, cultural values, economic priorities and political climates. But in all regions, building in resilience against risks is no longer optional. Instead, ESG is a strategic imperative.
Our research has uncovered that UK businesses that embrace ESG principles 鈥� regardless of the label 鈥� are better positioned to attract investment, mitigate risk and drive growth. With strong evidence linking ESG maturity to financial uplift, resilience and innovation, our research shows that UK firms are well place to grasp the opportunities available to them in today鈥檚 volatile and complex landscape 鈥� and indeed, are further ahead than global competitors in terms of grasping the 鈥渁ccelerators鈥� that will lead to enhanced success.
“What ultimately matters? The imperative to understand and manage interconnected environmental and social risks 鈥� because doing so is essential to protecting and generating lasting value.”
鈥� Neal Mehta, director in UK advisory, 海角视频
ACCESS the research
ESG as a catalyst for business
growth in the built environment
Related content
Royal London Asset Management ESG and Sustainability Strategy
Fostering ESG through inclusive design
Aviva Investors Sustainability Standards
Putting sustainability at the heart of placemaking
King鈥檚 Cross Roadmap to Net Zero and Decarbonisation
