Cyber security now the number 1 ESG concern across ASX companies: Perennial

While greenhouse emissions and diversity remain key issues, the spate of cyber breaches seen in 2022 has made cyber security the number one ESG issue.

The recent spate of cyber attacks across the corporate spectrum has pushed the cyber security atop the list of environmental, social and governance (ESG) concerns according to recent data from Perennial Better Future, the ESG-focussed fund manager housed within the broader Perennial Partners investment group.

After high profile cyber attacks on companies such as Medibank, Optus and Bunnings in 2022, the threat of cyber breaches has become front and centre for the Australian corporate sector according to findings in Perennial’s 2022 Better Future Survey report.

“The emergence of Cyber Security, up from fourth position in 2021 and consistent across larger and smaller companies, comes as no surprise given the raft of recent cyber-attacks,” Perennial stated in a release this week. “Many reported concerns in this area, including reputational risks, fines and regulatory attention, customer loss and litigation.”

According to Emilie O’Neill, co-head of ESG at the Perennial Better Future Trust, ESG priorities often shift among the c-suites of Australian companies, but this is the first time cyber has taken prominence.

“Generally greenhouse gas emissions, diversity, governance and modern slavery are considered the most important to ASX-listed corporates,” O’Neill said. “However, in 2022, Cyber Security emerged as the most important theme.”

The Perennial survey, which contacts 55 ASX-listed companies “from major banks to micro caps”, revealed consistent progress on prominent ESG initiatives despite a tough macro environment marked by ballooning energy prices, inflation and rising interest rates. Almost 80 per cent of respondents indicated that their business strategy specifically references ESG and sustainability, the survey notes.

Aside from cyber security, greenhouse gas emissions and diversity sit high on the ESG priority list for corporates in Australia.

Gender diversity remains a key issue, with companies struggling to achieve gender parity.

“Industry difficulties in attracting gender diverse talent pools was the biggest inhibitor to achieving a gender diverse workplace in 2022, consistent with prior years,” O’Neill said. “Competition for top female talent remained in second position and intensified in 2022. Lack of university graduates remained stable.”