ESG consulting has taken a front seat in investment practices globally, and this trend is seen especially around countries in Europe. The market size for ESG is estimated to reach close to $1 trillion in terms of revenue in the coming decade. As sustainable practices continue to rise as a growing concern for organisations and their consumers alike, companies are making a lot more effort into upgrading their current ESG planning and strategies.

So what are the latest ESG consulting trends that we will be able to observe in the coming five years? How are organisations planning on creating a more transparent, sustainable and accountable future for themselves and their stakeholders?

Large scale stakeholders are moving away from traditional investments to ESG investment opportunities

Traditional investment funds will see a drop in the next five years as big investors across Europe continue to shift towards more sustainable investment options. Green technology, sustainable development and sustainable economic growth are becoming a priority for countries across Europe. This means that large enterprises want to take control of their investments and redirect it towards building tools and technologies that can result in a more sustainable future for the rest of the world. 

There are increased chances of greenwashing practices under the name of ESG investments

Stakeholders also need to stay on the lookout for greenwashing practices that a lot of agencies might partake in as a part of their ESG investments. Greenwashing is a term that includes misleading or falsified information to make a project, service, product or venture seem a lot more sustainable and environmentally friendly than it actually is. 

There are instances where products are not actually ‘green’ in nature, but they seem greener due to the way they have been marketed to the audience. They use the right terms and language to lead the consumers or stakeholders to believe that they are indulging in green practices whereas they are being duped. ESG advisory services will help investors and stakeholders invest in opportunities that are actually sustainable and environmentally friendly instead of the falsely marketed options. 

Companies will be required to be a lot more transparent with their ESG reporting and practices

Over time, with the risk of greenwashing and falsified reporting, the governments across countries in Europe have realised that they need to ask organisations to be a lot more transparent with their ESG reporting. There are a lot of companies that use their ESG funds as a means of grabbing more investments when the ESG aspect of it is only a fraction of the entire fund. This is why the EU and other governing bodies have placed plans in place for the coming years that will make the funding agencies a lot more accountable for their investments than they have been so far. Their transparency levels will rise over time, and companies will actually make the effort into building better and more sustainable funding options for their stakeholders. 

Investments towards sustainable social development will continue to grow over the next five years

Another important part of ESG consulting includes creating social initiatives that help the people grow alongside the corporation. A lot of the time people end up confusing ESG investments with CSR opportunities, even though ultimately they might have the same impact. But, the key difference between the two is that ESG investments can be a part of the company’s business plan and help them generate more revenue. Social growth ventures are on the rise and will continue to do so as time progresses as stakeholders demand more holistic developmental practices from their investments.

Final Thoughts

Companies that are looking for ESG consulting and ESG advisory services to improve their ESG investments and reporting should know that the market is observing a steady growth rate. Today’s consumer and investor is a lot more conscious about the environment, the society, and the governance responsibilities that an organisation has to adhere to. Corporations across the world and especially in Europe are asked to be more accountable for their practices than ever before, and this trend is only going to grow over the next five years.