As the corporate movement known as ESG (environment, social, governance) turns 20 years old in 2024, it faces unprecedented headwinds, including an increasingly hostile political landscape in the U.S. But a new report looks ahead at 2024, painting a rosier picture in which greater clarity and established goals come into focus.
International ESG ratings agency MSCI’s 2024 look-ahead report reframes the very concept of ESG, pointing instead to trends in climate and sustainability, among them a focus on board oversight, AI management and supply chain due diligence.
Some of the agency’s key findings include:
- Regulators spotted more audit deficiencies and levied more fines in 2023 than previous years, by a wide margin. In the U.S., the Public Company Accounting Oversight Board (PCAOB) more than doubled both its regulatory penalties and audit deficiency rates from 2022 to 2023.
- Global large-cap companies saw an overall decrease in the number of board seats held by those with financial, risk management and industry expertise, indicating that nominating committees could be prioritizing new skills. This decline contrasts with consistent increases in board members with each of those skills between 2016 and 2021.