ESG ‘Bandwagon’ or Brave New World? - 550 businesses and investors weigh into the conversation

Sep 28, 2021

As economies open up and move past the sudden shocks of the past year, UK businesses are shifting their focus from ‘survive and stabilise’ to recovery and growth. Throughout the past year, Environmental, Societal and Governance (ESG) and Diversity & Inclusion policies have rightly become a popular topic of conversation among market commentators, consultancies and businesses. But where do these ideals rank for companies expecting or experiencing financial duress- and the institutions they rely on to finance them? 

To gauge the current state of the market, PwC surveyed 400 businesses which had weathered varying degrees of stress or distress. The survey also included 150 UK investors' views on whether they are more likely to extend finance to businesses with a clear ESG and D&I strategy in place.

Key findings 

Companies with clear ESG policies are able to access more flexible financing options, the survey found.  Almost seven in ten (68%) of UK businesses say they can access better financing options with stronger ESG credentials.  

ESG is seen as a vital tool for attracting future talent - and selected as an objective of ESG strategy by almost half (49%) of businesses surveyed. This was followed by future-proofing the business, with 40% selecting this as an objective. 

One of the major benefits of prioritising D&I as an effective tool in their current change management or restructuring programmes is driving innovation and growth – 73% of UK businesses rank this within their top three benefits.

66% of businesses also agreed that change programmes including D&I are more successful.  

Steve Russell, head of Business Restructuring Services at PwC, said: 

“In the backdrop of government support rolling off and existing liabilities coming to the boil, it’s no longer enough to pay lip service to these principles via high-level policies. Key processes including accessing flexible financing options, retaining talent and future-proofing businesses are increasingly being anchored to the ESG and D&I targets.

“It’s a critical time for businesses to reassess how their commitments on sustainable change can be supported and translated into the tangible steps investors will want to see. Businesses must act now to make the shift from recovery to sustainable growth.” 


The results of the survey – the first of its kind in the UK – shows how the momentum around ESG and D&I  is only set to increase. Almost three quarters (73%) of UK businesses interviewed confirmed the COVID-19 pandemic had already increased their commitment to D&I. 

UK businesses are clear on the benefits of incorporating ESG and D&I  into change management and restructuring programmes. Yet accurately monitoring change within the organisation remains a major barrier to progress. The financial and operational climate, although improving, is also highly changeable. 

Supply chain focus 

Events of the past 18 months have reinforced the importance - and also highlighted the fragility -  of certain supply chains at home and overseas. 

Our survey found that UK businesses appear to overlook the sustainability of their supply chains in change management and restructuring programmes. When we asked UK businesses about their objectives for current change management and restructuring programmes, making their supply chain environmentally and socially responsible came bottom of the list of priorities – just 5% ranked these as their main objective. 

Jason Higgs, business restructuring services ESG leader and PwC partner, said: 

“Having observed the challenges faced by supply chains over the past 18 months and the ongoing fallout as we move to recovery, business can no longer make the costly error of over-reliance on sole overseas suppliers. Addressing this problem provides a great opportunity to look at supply chains with an ESG lens."

“Any hesitancy, or even reluctance, to improve environmental and social resilience within the supply chain could act as a weak link in their armour when looking to pivot from recovery to growth.”

What’s the investor view? 

With half of all global assets under management - approximately $55 trillion - now linked to Net Zero commitments, the views of 150 UK banks; Asset Based Lenders and other financiers show a clear shift towards a more searching focus on ESG and D&I: 

More than seven in ten (72%) say a clear and demonstrable ESG proposition increases their likelihood to extend financing. Almost four in ten (39%) reported it significantly increases the likelihood.

Almost six in ten (59%) of investors are more likely to extend financing in a company with a D&I policy in place. 

Investors are also under pressure from their own investors and stakeholders to extend financing to companies with a clear ESG and/ or I&D policy in place – 44% rank this within their top three reasons for extending financing.

The survey suggests this cascading effect, in addition to societal pressures surrounding these issues, will continue to prompt investors to demand more from the business community when it comes to their commitment to ESG and D&I.

Some sticking points still remain

While corporates and funders recognise the importance of ESG and D&I, there are real challenges quantifying and measuring their performance. A third of UK businesses have no procedures in place to measure diversity and inclusion. 

Over half (51%) of UK businesses say that while their ESG proposition is clearly articulated, they have not yet developed ways to measure success.

Victoria Tillbrook, business restructuring services partner at PwC, said: 

“If businesses want to reap long-term rewards, a unified approach to ESG and D&I policies across the organisation are essential. Yet our survey highlights a disparity between C-suite and other senior level executives in attitudes towards ESG and D&I. 

“The C-suite, for example, is more likely to say that diversity and inclusion is a priority in their change management and restructuring programmes. Six in ten say this is the case, compared to 47% of senior level executives.” 

Sector focus 

When looking across sectors, businesses within the Financial Services sector are encountering the most difficulty when looking to measure ESG. Just over a quarter say that they have steps in place to measure ESG success within their organisation, compared to 34% across all industries. 

Smaller businesses also find it harder to quantify ESG success within their organisation. While 58% of $1bn+ organisations say they can measure ESG, this is the case for just 29% of businesses with a revenue of $100m – $999m. 

Steve Russell, head of business restructuring services at PwC, added: 

“Businesses must map out an actionable roadmap unique to their organisation. This is not a project that can be rushed – it needs to be well thought through and embedded across the organisation, possibly on a level that businesses are unprepared for.  Businesses must prepare for any possible scenario thrown their way.”



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Felix Ampofo

Felix Ampofo

Manager, Media relations, PwC United Kingdom

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