More than half of US general counsel said their organisations had altered strategic business decisions over the past year due to environmental, social and governance concerns, according to a Morrison Foerster and Corporate Counsel survey.

The third annual GCs and ESG survey found that 52% of GCs said their organisations had changed their strategies due to ESG this year, compared to 37% a year earlier. That was driven by a shift in ESG drivers from concerns about public perceptions to risk management and regulatory compliance considerations.

Organisations are also increasingly moving ESG responsibilities away from the legal function to the broader C-suite and chief compliance officers, with 40% of GCs saying they or their department leads on ESG strategy, compared to 77% back in 2022.

Susan Mac Cormac, global co-chair of MoFo’s ESG practice, said: “Smart organisations are preparing beyond regulatory disclosure requirements and looking past the external ESG scrutiny to assess how their ESG programme can help with risk management, operational efficiencies and shareholder value creation.”

GCs said there was a greater focus on the governance aspect of ESG this year, with 61% identifying it as a high priority compared to 53% in 2023. MoFo said this could be due to the increased complexity of ESG reporting and disclosure. There was also an increased focus on community engagement, charitable giving and supply chain management, while there was a lower priority given to diversity, equity and inclusion and climate change issues.

GCs were also less confident their organisations have a comprehensive ESG programme in place (44% compared to 69% in 2023), with almost half of respondents (45%) saying their internal stakeholders don’t know how to ‘own’ ESG as part of their organisation’s culture – more than double what it was a year ago.

While there has been a growing backlash against ESG initiatives in the US, more than half the respondents (56%) said they hadn’t experienced any of that negative sentiment directed towards their organisation. However, almost a quarter said they have stopped using the term ESG or are planning to change how they label it.

Mac Cormac said: “The future of ESG is helping organisations see around climate, governance and human capital corners so they are not only prepared but can exploit the opportunities that arise. As we see in the survey results, ESG is here to stay and the keys to success will be internal collaboration, good governance and new technologies.”

The survey was based on 97 responses from GCs and other legal heads at US companies, government agencies and non-profit organisations.