海角视频鈥檚 latest research unveils a compelling link between mature risk and asset management strategies and improved business outcomes for US organizations, showing that resilience isn鈥檛 just a defensive strategy, but a platform for innovation and competitive advantage.
Making business sense
In today鈥檚 politically charged climate, the term 鈥楨SG鈥� can be controversial. But behind the rhetoric, and highlighted by our latest research, lies a clear and compelling truth: the underlying actions associated with ESG 鈥� i.e. the integration of environmental, social and financial risks into the core of business strategy 鈥� are simply smart business, and drive measurable improved performance for businesses with built assets.
Our research illustrates that whether labelled as 鈥榬isk management鈥�, 鈥榮ustainability鈥�, 鈥楨SG鈥� or simply 鈥榖usiness operations鈥�, the opportunity is the same: initiatives that underpin strong environmental and social performance remain imperative to good financial performance.
Good business management demands proactive measures: reducing risk to physical asset portfolios, avoiding regulatory or reputational exposure, and committing to transparent reporting. Whatever the label, these actions are essential to long-term success.
“When we talk about 鈥楨SG鈥� in our research, we are talking about finding and executing the win-wins 鈥� advancing a business鈥� financial performance while also positively impacting environmental, social and governance aspects.”
鈥� Hanna Swaintek, principal – US advisory, 海角视频
Filling the business performance evidence gap
海角视频 engaged senior US executives across investment firms, real estate managers and corporate real estate departments to uncover how the effective management of interconnected environmental, social and economic risks can be leveraged to enhance business resilience, create value and improve long-term business performance. This research was conducted after the result of the 2024 presidential election, with respondents aware of the change in administration and cognizant of the policy shifts this would bring. .
The findings offer a robust evidence base, empowering leaders to act with confidence. Integrating environmental and social risk management into the core of the company is fundamentally about preparedness, performance and delivering long-term business value. Reframing the management of built assets as a platform for innovation, resilience and growth can unlock significant value, enabling businesses with large physical asset portfolios to attract investment, remain competitive and avoid stranded assets in volatile times.
Key findings
of respondents are developing an ESG strategy, have or are actively integrating ESG into their organization鈥檚 core strategy.
of respondents say that ESG positively impacts their financial performance.
of these senior executives, over 47% reported an increase of over 11% and a further 37% reported a 5鈥�10% increase.
of respondents say that climate risk and the related insurability and cost of insurance is a rising concern for the near future.
MATURITY
Despite regulatory uncertainty, especially around federal climate disclosure rules, US firms are forging ahead. 59% of respondents are either developing an ESG strategy or actively working to integrate initiatives that underpin them into their broader strategy, while 30% of respondents say they have already embedded into their organizations鈥� core strategies (total: 89% vs global total: 82%).
FINANCIAL IMPACT
87% of senior executives in our research say that environmental and social initiatives have a positive impact on financial performance. This is higher than the average we saw globally (79%). In the US, 62% reported a sizeable or growing positive impact vs the global total of 54%, highlighting that many businesses in the US are seeing positive returns.
SIZE OF THE PRIZE
47% of those who reported a financial uplift saw an increase in financial performance of over 11%, while another 37% reported gains between 5鈥�10%. This uplift is more pronounced in the US than globally, where 40% of respondents reported improvements exceeding 11%. This suggests that US firms are particularly well-positioned to turn risk management into a strategic advantage – even amid, or perhaps because of, a complex political, economic and business environment.
EVOLVING RISK PROFILES
68% 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. Here we see a consensus between US respondents and our total global respondents, who also reported this number as 68%. The increase in frequency and severity of climate events, such as wildfires in California, floods in Texas and hurricanes along the Gulf Coast, make the鈥痜inancial and operational risks鈥痮f climate change more鈥痶angible and immediate.
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
An organization鈥檚 environmental and social strategies are often shaped by local market dynamics. Regulatory pressure is a stronger motivator in the US than globally (US: 55%鈥痸s鈥痝lobal: 46%). This may reflect the state of flux of ESG-related regulations, such as SEC climate disclosure rules, meaning state level mandates are leading the charge in their place (e.g. SB 253 and SB 261 in California).
Attracting investors is a universal driver, with 45% of both US and global respondents ranking it as their second most important motivation.
For the third motivation (increasing long-term value), this was still ranked, but was slightly less emphasized in the US (US: 38% vs global: 40%), suggesting a more immediate focus on risk mitigation and contribution to core business performance.
The essential factors for success
What is considered most important in driving success? Globally through the research we identified that that will unlock performance.
82% of respondents indicated the importance of measuring performance at the portfolio or fund level. At the asset level, this figure was 78%, reflecting how critical it is to integrate these metrics into operational practices. Additionally, 80% of respondents highlighted the importance of a solid track record of ESG-focused investments, underscoring a deepening commitment to sustainable strategies. With this solid base, now is the time for US businesses to further seize the opportunities on offer.
Accelerating performance
: four strategies that our leader group (top quartile of global respondents) valued significantly more than everyone else. For US firms, a large majority reported the importance of the following:
ESG leaders
US respondents
A strong business case for action (77%)
Material, achievable targets with a plan for execution (74%)
Viewing and practicing ESG as a catalyst for innovation and growth (74%)
Skills and capacity to drive ESG projects and programs (75%).
These figures are higher than our global respondents, signalling a that a shift from intention to implementation is well underway in the businesses surveyed 鈥� with environmental and social initiatives and KPIs increasingly embedded in wider strategic business planning.
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.
Investment in many environmental and social areas continues despite the label 鈥楨SG鈥� falling out of political favor. As both federal and private funding dedicated to proactively strengthening built assets, , US organizations must think creatively about how they position and label work they may have previously titled 鈥檚ustainability鈥� or 鈥楨SG鈥�.
Resilience and risk management: the new business imperatives
In today鈥檚 complex landscape, building resilience is no longer optional. The true opportunity lies in transforming it into a strategic advantage 鈥� this is where the forward-thinking leaders are focused.
Our research has uncovered that those US businesses that embrace environmental and social activities 鈥� regardless of the label 鈥� are better positioned to drive business performance and growth. They are actively embedding environmental and social risk management into their core strategies to create value and stay ahead. They are demonstrating that a focus on environmental and social factors is not a distraction from financial performance, but rather a driver of it.
“ESG is a dirty word in many circles today, but the work that underlies any good ESG program 鈥� reducing climate risk, improving supply-chain resilience, getting ahead of regulations 鈥� is continuing in force because it makes business sense. You just need to play the name game. Let go of ego, think creatively to find the right labels that decision-makers in your circles value and push onward.”
鈥� Mike Stopka, advisory midwest market lead,鈥＝鞘悠�
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