Actions Speak Louder than Words
The 18th edition of Black Sun Global’s Complete 100 assesses trends and practices in the FTSE 100’s disclosure against stakeholders’ expectations.
Changing regulations, technological disruption, global competition, the political climate and the need for more inclusive and sustainable economic systems, mean we are now living in the stakeholder economy. As the economic environment changes and fluctuates, so do the expectations of stakeholders, particularly around disclosures.
Reflecting this shift, the 2023 Complete 100 research assesses trends and practices in the FTSE 100’s disclosure against stakeholders’ expectations, amidst growing demands for better, measurable and authentic information on which actions companies are taking on ESG and sustainability issues.
Key findings from our research by stakeholder group
Investors
Two of the key topics to emerge in this area were Purpose and ESG. A strong purpose positively influences financial performance. Attaching pay to purpose provides accountability towards creating real action. 59% of FTSE 100 companies link purpose to remuneration, showing that purpose is being engaged with at more than a base value.
Engaging with investors on ESG can provide access to a wider range of capital sources. Aligning ESG with pay will provide greater motivation for executives to engage around ESG. We found that 91 companies link ESG to variable remuneration.
Investors
Two of the key topics to emerge in this area were Purpose and ESG. A strong purpose positively influences financial performance. Attaching pay to purpose provides accountability towards creating real action. 59% of FTSE 100 companies link purpose to remuneration, showing that purpose is being engaged with at more than a base value.
Engaging with investors on ESG can provide access to a wider range of capital sources. Aligning ESG with pay will provide greater motivation for executives to engage around ESG. We found that 91 companies link ESG to variable remuneration.
Clients
The cost-of-living crisis is one of the biggest challenges facing UK consumers and businesses since the 2008 banking crisis. This coupled with high inflation creates a challenging environment for businesses.
In this environment, it is very important for companies to engage with their customers on the cost of living. 70% of companies mentioned the cost-of-living crisis. This was across a range of industries, both B2C and B2B. This was mentioned less in leadership statements with only 34% of CEOs and Chairs mentioning the cost of living.
Clients
The cost-of-living crisis is one of the biggest challenges facing UK consumers and businesses since the 2008 banking crisis. This coupled with high inflation creates a challenging environment for businesses.
In this environment, it is very important for companies to engage with their customers on the cost of living. 70% of companies mentioned the cost-of-living crisis. This was across a range of industries, both B2C and B2B. This was mentioned less in leadership statements with only 34% of CEOs and Chairs mentioning the cost of living.
Employees
Employees are one set of stakeholders that have become increasingly important for companies. This group is undergoing a significant demographic change. The workplace is now comprised of 3 to 4 generations. One prominent aspect of Gen Z’s influence is their emphasis on sustainability and ESG practices.
This makes the communication of an organisation’s environmental progress, social activities, and linkage to strategy, especially important. 92% of companies have a clear sustainability strategy in place and 86 integrate it into the corporate and business strategy.
Employees
Employees are one set of stakeholders that have become increasingly important for companies. This group is undergoing a significant demographic change. The workplace is now comprised of 3 to 4 generations. One prominent aspect of Gen Z’s influence is their emphasis on sustainability and ESG practices.
This makes the communication of an organisation’s environmental progress, social activities, and linkage to strategy, especially important. 92% of companies have a clear sustainability strategy in place and 86 integrate it into the corporate and business strategy.
Suppliers
Suppliers are one of the stakeholder groups that tend to be neglected in terms of company engagement. However, engaging suppliers can create a more sustainable and responsible business ecosystem, benefiting both companies and the communities in which they operate.
Companies that engage with their suppliers beyond the transactional part of the relationship, can be proactive about fair and sustainable practices, and adopt mitigation strategies against potential risks.
Our research found that only 8% of companies describe the processes through which they identify stakeholders across their value chain. This means companies are open to criticism for supply chain practices and appear to fall short of real accountability and transparency towards stakeholder engagement.
Suppliers
Suppliers are one of the stakeholder groups that tend to be neglected in terms of company engagement. However, engaging suppliers can create a more sustainable and responsible business ecosystem, benefiting both companies and the communities in which they operate.
Companies that engage with their suppliers beyond the transactional part of the relationship, can be proactive about fair and sustainable practices, and adopt mitigation strategies against potential risks.
Our research found that only 8% of companies describe the processes through which they identify stakeholders across their value chain. This means companies are open to criticism for supply chain practices and appear to fall short of real accountability and transparency towards stakeholder engagement.
Regulators
Regulators are a key stakeholder group for companies. This is especially in terms of the sustainability regulations and standards that is proliferating and create an ever-evolving picture. Companies have more to gain by being proactive rather than reactive to regulation. By engaging with regulators, corporations can gain insights into emerging risks, regulatory changes, and best practices. This helps them proactively manage risks, improve operational efficiency, and protect their long-term viability.
With the increasing effects of the climate crisis, we looked at the impact of regulators on climate and emission reporting. According to our research, most companies have net zero targets (82%). However, only 33% of companies have a climate transition plan.
Regulators
Regulators are a key stakeholder group for companies. This is especially in terms of the sustainability regulations and standards that is proliferating and create an ever-evolving picture. Companies have more to gain by being proactive rather than reactive to regulation. By engaging with regulators, corporations can gain insights into emerging risks, regulatory changes, and best practices. This helps them proactively manage risks, improve operational efficiency, and protect their long-term viability.
With the increasing effects of the climate crisis, we looked at the impact of regulators on climate and emission reporting. According to our research, most companies have net zero targets (82%). However, only 33% of companies have a climate transition plan.
NGOs and Civil Society
Sustainability issues, such as climate change, social inequality, and human rights, transcend national boundaries. International frameworks attempt to enable a global approach to addressing these challenges, by providing guidance that is applicable across jurisdictions.
International frameworks can also drive research and development efforts, stimulate technological advancements, and support the dissemination of innovative solutions to global sustainability challenges. Our research found that 71% of the companies refer to recognisable frameworks, such as the Sustainable Millennium Goals (SDGs), UNEP FI, Principles of Responsible Investment etc. This demonstrates acknowledgment of international frameworks and the need for global collaboration on sustainability issues.
NGOs and Civil Society
Sustainability issues, such as climate change, social inequality, and human rights, transcend national boundaries. International frameworks attempt to enable a global approach to addressing these challenges, by providing guidance that is applicable across jurisdictions.
International frameworks can also drive research and development efforts, stimulate technological advancements, and support the dissemination of innovative solutions to global sustainability challenges. Our research found that 71% of the companies refer to recognisable frameworks, such as the Sustainable Millennium Goals (SDGs), UNEP FI, Principles of Responsible Investment etc. This demonstrates acknowledgment of international frameworks and the need for global collaboration on sustainability issues.
For a copy of the research, please get in touch with our Head of Business Development, Naomi Hawkins.