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Corporate Sustainable Leadership Awards: Insights on ESG adoption
More companies embracing ESG to enhance decision-making, minimize risks to bottom line
Asset Benchmark Research   21 Jul 2025

In today’s rapidly evolving business landscape, environmental, social and governance ( ESG ) factors have become integral to how companies approach financial decision-making and risk management. Far from being a passing trend, ESG considerations are now seen as essential for ensuring long-term profitability and resilience. That’s according to data from Asset Benchmark Research ( ABR ), which engaged with companies last year on their sustainability approaches as part of The Asset's Corporate Sustainable Leadership Awards.

Impressively, around 87% of companies surveyed by ABR state that they consistently consider ESG factors in their financial decision-making and risk management processes. This stems from a number of factors. Companies now actively integrate ESG into their financial strategies to mitigate risks that directly impact their bottom line. Environmental challenges, such as climate change or resource depletion, can disrupt supply chains, inflate operational costs, or trigger hefty regulatory fines. 

For example, stricter carbon emission rules can catch unprepared companies off guard, leading to unexpected expenses. Social issues, like labour disputes or community unrest, can tarnish a company’s reputation, resulting in lost revenue. Meanwhile, governance missteps, such as ethical lapses or weak oversight, can erode investor confidence and destabilize finances.

By proactively addressing these risks through ESG-focused strategies, such as investing in energy-efficient technologies or fostering ethical governance, companies can safeguard their operations and strengthen financial stability.

Investor expectations are another powerful force behind the ESG surge. Today’s investors, particularly institutions like pension funds and asset managers, view strong ESG performance as a sign of a company’s long-term viability.

A 2023 PwC report highlighted that nearly four out of five investors factor ESG into their decisions, often rewarding companies with robust ESG practices with higher valuations and cheaper access to capital. By aligning financial decisions with ESG principles, businesses can tap into this growing pool of capital. For instance, issuing green bonds to fund sustainable projects not only attracts ESG-focused investors but could also lower borrowing costs, creating a win-win for profitability and purpose.

Yet, despite the opportunity around sustainability, companies still report challenges in implementing such strategies. According to ABR data, the top hurdle facing companies in crafting an ESG strategy is regulatory uncertainty, followed by limited availability of reliable data and metrics and uncertainty over return on investment.

With ESG regulations rapidly evolving and varying across different regions, industries and jurisdictions, it is understandable why some companies are taking a gradual approach when adopting sustainable practices. Governments and international bodies frequently update standards, which can result in a moving target for compliance and lead to hesitation from companies in committing to long-term ESG plans.

The lack of ESG data is another significant challenge. ESG reporting requires accurate, consistent, and verifiable data on diverse factors like carbon emissions, labour practices, or governance structures. However, data collection is often hampered by incomplete records, inconsistent methodologies, or a lack of standardized metrics across industries. Third-party data providers may also vary in quality or scope. Without reliable data, companies struggle to set measurable goals, track progress, and report transparently, thereby undermining their credibility and decision-making.

Executing an ESG strategy involves multiple resources and long-term planning, and as such, there is uncertainty over return on investment. The benefits may take years to materialize or are hard to quantify. Economic pressures or shareholder demands for short-term profits can make justifying these investments challenging. Overall uncertainty about financial returns discourages companies from prioritizing ESG strategies, especially in a resource-constrained environment.

These are some of the key insights from companies in the Asia-Pacific region that we engaged with as part of our Corporate Sustainable Leadership Awards last year.

Interested to take part in this year’s Corporate Sustainable Leadership Awards? Please reach out to us at sustain@theasset.com.

For more information about the awards programme, please go here.