A recent survey conducted by PwC found that environmental, social and governance (ESG) factors and diversity and inclusion (D&I) are now key considerations for accessing finance. Joe Pickard speaks to PwC Business Restructuring Services team partner Jason Higgs about how the firm is positioning itself to assist clients with their ESG and D&I initiatives



The Big Four firm asked 400 businesses which had weathered varying degrees of stress or distress along with 150 UK investors about their views on whether they are more likely to extend finance to business with a clear ESG and D&I strategy.

Key findings of the survey included:

  • Almost seven in ten (68%) of UK businesses say they can access better financing options with stronger ESG credentials;
  • ESG is seen as a vital tool for attracting future talent – this selected as an objective of ESG strategy by almost half (49%) of businesses surveyed, followed by future-proofing the business, with 40% selecting this as an objective;
  • One of the major benefits of prioritising D&I as an effective tool in change management or restructuring programmes is driving innovation and growth – 73% of UK businesses rank this within their top three benefits;
  • Some 66% of businesses also agreed that change programmes including D&I are more successful;
  • More than seven in ten (72%) investors say a clear and demonstrable ESG proposition increases their likelihood to extend financing.


The Accountant: Some 49% of respondents suggested that ESG is a vital tool for attracting future talent, and that this has been an objective of their ESG strategy. Does this mean the ESG principles they are building into their business are in danger of becoming a PR exercise? How do they show future talent that ESG is important to them?

Jason Higgins: There is always a risk of this, but the workforce of today is rightly demanding of their employers. Younger generations in particular are increasingly holding their employer to account around an organisation’s purpose and commitments to society- this includes the stance around ESG.

To be able to satisfy employees, as well as other stakeholders that ESG strategies are more than lip service, the framework needs to be turned into a plan setting out a suite of ESG principles which they will abide by and further developed into KPIs that can be measured and reported against to demonstrate progress.

In larger firms in more regulated capital markets, such requirements are already becoming expected and mandated. Of those surveyed, 51% suggested they have not yet developed ways to measure success, so it’s clear that this is an area that needs to develop further in the short term.


TA: Investor demand is clear for ‘demonstrable ESG proposition’. Do you believe this will increase the demand for the adoption of non-financial reporting standards such as the proposed ISSB?

JH: The survey suggests that businesses are not adopting ESG principles to solely comply with regulation – only one in five (22%) suggest this is the case.

However, it’s becoming increasingly apparent, as consumer and stakeholder pressure mounts, that increased regulation and standardisation is needed in order to provide clarity to organisations on how they report on non-financial issues such as ESG.

The proposed ISSB non-financial reporting standard will help provide a common sustainability framework on this complex and often fragmented area and should be welcomed. It is likely that in the near future we will see the requirements of standards such as the ISSB increase, particularly as the demands of stakeholders increase.


TA: How are you assisting businesses with their ESG and D&I programmes? Does this vary between businesses?

JH: In terms of ESG, organisations are often on very different stages of their ESG journey, with, for example, some companies setting ambitious net zero targets and with a clear plan to operationalise these but other, often smaller businesses, still in the early stages of their journey.

PwC supports across all stages of this journey, whether this is advising on strategy, working with management teams to set and measure KPIs linked to the key elements of their strategy, supporting companies or lenders to issue sustainability linked finance, operationalising the transformation to reduce greenhouse missions or through sustainable supply chain and cost-based transformation.

Organisations are similarly at different stages of their D&I journey. Our clients look for support through every stage, from diagnostics and delivering an inclusion insights assessment, to developing an inclusion and diversity strategy to meet the needs of employees and customers, to providing data infrastructure and analysis support.

PwC supports clients through each stage, ensuring organisations have the right information and tools to deliver.


TA: When potential clients approach you for advisory work, have ESG and D&I advisory services been a priority they are looking for help with?

JH: ESG and D&I topics are at the top of our clients’ agendas, whether that is lenders looking to assess the impact of businesses they lend to, or companies looking to restructure or transform their business to capitalise by way of a more sustainable recovery post-pandemic.

With regards to ESG and climate, there is a clear recognition that ignoring this topic and being unable to communicate your position and progress against your objectives can risk your deselection from a supply chain or make you less competitive when it comes to financing and retention of talent.

Likewise, with D&I, studies show that a more diverse workforce and management team drives innovation and leads to more diverse and creative thought processes. Not investing in a more diverse workforce can expose an organisation to ‘groupthink’ and a lack of diversity of thought. This can be catastrophic at times of higher risk, driven by rapidly evolving conditions or markets – such as the ones we face today.


TA: How is PwC developing its ESG and D&I advisory services? How do you see this area growing in the future?

JH: There has been significant investment across PwC in ESG as set out in The New Equation, where globally the firm has set out an aspiration to hire an additional 100,000 professionals by 2026.

We believe that ESG isn’t an isolated topic but a consideration that needs to be embedded in the heart of business and how it makes decisions. We expect significant growth in demand for support in this area over the coming year and beyond, particularly as companies need support to develop, execute against and measure their ESG targets.

Our clients are realising that they must act now on this topic to ensure a sustainable recovery especially in uncertain times.

As with ESG, D&I is an essential part of the equation for driving businesses forward and attracting diverse talent to meet the needs of organisations and society. We are investing in technology, such as virtual reality, machine learning, and visual analytics, to enable better learning, awareness, and integration of diversity and inclusion.

Not only do we look to develop tools and programmes in the D&I space, we look at how it integrates into existing offerings and ways of working with our clients.

As more awareness is coming into the space, it has become increasingly important that D&I is not only an area to focus on and develop, but also the way to deliver positive impact.