Only 18% of financial institutions and 27% of investment firms have a net zero transformation strategy that looks beyond the next 12 months, despite nearly three-quarters of business leaders in the financial services sector urging companies to embrace ESG initiatives in order to maintain relevance in the future, according to a survey by law firm Mayer Brown.
The cost of transitioning to net zero is often cited as a significant obstacle to business transformation. As companies face the financial challenges of this transition, many are turning to mergers and acquisitions to accelerate their progress and enhance their environmental credentials more quickly.
However, 77% of investment firms and 69% of financial institution leaders said companies must embrace sustainability if they are to thrive in the next economy and manage short-term ESG backlash to secure long-term positive stakeholder/shareholder engagement.
The survey also identified seven key dimensions of a business that is future ready: Creative Capital, Geopolitical Agility, New Risk Mindset, Regulation Anticipation, Sustainability Focus, Tech Resilience, and Visionary Growth & Leadership.
“We undertook this survey to uncover the multifaceted and sometimes conflicting opportunities and obstacles confronting industry leaders, and to establish benchmarking solutions for achieving business transformation,” said Jon Van Gorp, chair of Mayer Brown.
“Our seven dimensions provide a framework for navigating these issues, aiding clients in their transformation journeys. With a clearer understanding of the drivers of transformation, business leaders, in collaboration with their legal teams, are well-positioned to evolve into ‘the Next Organisation’”.
Among the most significant insights, the survey found that nearly two-thirds (64%) of business leaders acknowledged the need for complete organisational transformation, and 68% believe the current market environment creates challenges to accomplishing business transformation. However, over two-thirds (68%) of financial institution leaders say their organisations are not transforming fast enough (compared to 62% of investment firms).
Meanwhile, while 86% of financial services firms have an overall business transformation strategy in place, most do not look beyond 12 months. Over two-thirds (64% of financial institutions and 69% of investment firms) believed their organisations need complete transformation to thrive and create value.
