Wharton Survey Finds All Systems Go with ESG and CSR, Despite Politics

The survey of 400 managers at large organizations finds general agreement that Corporate Social Responsibility and Environmental, Social, Governance issues are here to stay.

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A recent report published by the Wharton ESG Initiative, “Emerging Trends in Institutional Social Responsibility," finds “widespread adoption of CSR (Corporate Social Responsibility) and ESG (Environmental, Social, Governance) practices, reflecting their vital role in today’s business landscape. However, critical gaps remain in areas such as environmental sustainability, diversity programs, and ESG risk management.”

The report “draws on survey data from over 400 employees at organizations with over $50 million in annual revenue. It explores their perceptions, attitudes, and actions related to key CSR focus areas such as labor standards, diversity, customer welfare, and environmental sustainability. It also examines approaches to ESG investing and associated challenges,” say the study authors.

The respondents are C-suite and financial executives at for-profit and nonprofit organizations with annual revenues over $50 million. The survey was conducted in March 2023 by Willow Research LLC online and on an anonymous basis. It “was designed to explore the role and importance of CSR and ESG practices in a broad-cross section of organizations.”

Explains Professor Witold Henisz, Vice Dean of the ESG Initiative, “This report highlights the substantial progress made in integrating social responsibility into business operations, while also uncovering key opportunities for continued growth...To fulfill the promise of CSR and ESG, companies must fully incorporate them into their core business strategies.”

Key Findings

92% of the sample say that their organization places high or very high priority on corporate social responsibility.
Nearly 80% agree or strongly agree with the policy of linking executive pay to progress in meeting social and environmental targets.
Over 75% state that their organization invests in a way that reflects its purpose and mission.

The authors make no mention of the anti-ESG backlash, finding that “CSR and ESG are central to the current business landscape and will likely remain at the forefront of business strategy. The path to a more sustainable and socially responsible corporate world is both challenging and promising, with ample opportunities for businesses to evolve, innovate, and drive positive change. It is anticipated that these principles will continue to guide businesses towards sustainable growth, greater inclusivity, and more meaningful engagement with all stakeholders.”

Other Insights

Despite rising awareness and recognition of the importance of DEI, the survey reveals a mixed picture; 63% of respondents reported that their organizations have established programs or initiatives centered on DEI, meaning 37% have yet to adopt formal strategies.
There is a shared sentiment that CSR programs are not fleeting trends but rather enduring, influential fixtures in the corporate world, set to proliferate further. Many respondents also endorsed the notion of linking executive remuneration to an organization’s CSR performance, indicating a preference for a more tangible, accountability-driven approach to CSR. Views expressing skepticism towards CSR initiatives were noticeably sparse among the respondents. A few agreed with the idea that CSR initiatives often prescribe unattainable goals or that “greenwashing” – the act of conveying false and misleading claims about an organization’s positive impact – is a significant concern.
According to survey respondents, an internal team dedicated to monitoring and ensuring compliance with labor standards is the most prevalent approach to complying with such standards but there remains a lack of external auditing to verify practices.
While the findings suggest a substantial commitment to customer rights and welfare, they also highlight room for improvement; more robust adoption of these practices can lead to enhanced customer trust and satisfaction, strengthening relationships and fostering sustainable growth.
A significant trend in ESG investing is the alignment of investment practices with broader organizational purpose and mission, suggesting that most organizations are incorporating ESG considerations not just as a method for financial gain, but as a core component of their strategic objectives.
Employees should be more involved in ESG strategies, given that it appears most companies leave these issues in the hands of senior management. “Employees, particularly those not in senior positions, often have unique insights into operational aspects of the business and may be able to identify potential ESG opportunities or risks. Encouraging their active participation could also enhance overall organizational commitment to ESG goals.”

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