KUALA LUMPUR (July 14): A report from Citi revealed today that more clients are embracing different areas of finance to meet their environmental, social and governance (ESG) goals.

According to Citi, the results of its survey revealed that 54% of the respondents already have ESG policies and practices integrated in their organisations' corporate strategies while close to 90% of the remaining respondents intend to roll out ESG policies and practices within five years.

Meanwhile, with Covid-19 presenting new challenges, ESG issues that were previously on the periphery are now in the forefront for many companies, as over two-thirds of the respondents attributed Covid-19 to being a driving force of ESG policies and practices in their firms.

According to the survey, the main drivers behind the adoption of overall ESG standards among those who responded to the survey include: alignment to overall corporate sustainability strategy (65%), positive impact on relationships with customers and stakeholders (57%), social and environmental factors (48%), regulatory obligations and pre-empting broader policy and regulatory changes (42%), access to funding dedicated to ESG projects (28%), and demand and pricing impact on ESG products (22%).

The Citi survey also asked respondents to rank the top three stakeholders who are most vocal in advocating ESG policies and practices in their organisations: 33% ranked governments/regulators in the top position, followed by investors (21%) and customers (20%).

When asked to rank the top three sustainable and green finance instruments that they were most interested in or exploring, green bonds came on top at 22% while most respondents (42%) chose ESG-linked working capital financing as one of their top three choices.

The survey was conducted in the first quarter this year among 259 institutional clients in 14 markets across Asia-Pacific to better understand how they were embracing the ESG agenda. Of these respondents, Citi said the majority hold senior level positions in their firms — 16% are chairmen, presidents or chief executive officers; 24% are other C-Suite executives; 26% are managing directors and directors; and 28% are senior vice presidents and vice presidents.