Noerr study on ESG and its influence on corporate transformation

As companies’ activities are becoming increasingly sustainable, ESG is today a strategic topic of the future for large businesses in particular. Those are the findings of a recent study carried out by the law firm Noerr in collaboration with Professor Isabell Welpe of the Technical University of Munich and Professor Marc-Philippe Weller of the University of Heidelberg. “The survey respondents’ assessments clearly show that ESG considerations are increasingly moving to the centre of entrepreneurial activity – due to both legal requirements and stakeholders’ expectations,” says Ingo Theusinger, partner and ESG project group head at Noerr.

 

Subject of the study

Achieving ESG-related targets is gaining importance when transforming companies and business models. With this in mind, the study analyses the significance and role of ESG issues in internationally operating German companies when making business decisions and during corporate transformation processes.

The study surveyed 100 decision-makers from management levels in various sectors of the German economy using a detailed questionnaire. Furthermore, over 30 interviews were conducted with decision-makers at C-level, Vice President positions and heads of department in leading German companies across various industries. The combination of quantitative and qualitative empirical research, supplemented by the legal analysis performed by Noerr and Professor Weller, provides comprehensive insight into the current significance and role of ESG issues in German companies.

Findings of the study

To summarise, ESG is firmly anchored in companies’ long-term strategy. ESG issues and ESG obligations have changed companies’ strategic approach towards sustainable entrepreneurial activities and, according to the interviewees, will do so even more in the future. This is reflected both in their long-term strategy and their business models, as well as in the corporate organisation.

Selected findings of the study confirm this:

• Regulatory requirements and the social relevance of ESG issues have a major influence on entrepreneurial activity. The e-dimension, especially climate protection, is currently the focus of attention.
• The strategic importance of the topic is reflected in companies’ internal structures: in most cases, the management (often the CEO) and supervisory bodies handle the topic of ESG, while dedicated ESG departments are often already part of the organisation.
• The majority of companies think that ESG will lead to a change in their company, both in terms of their operational business and their internal organisation. The transformation of business models to integrate ESG issues requires comprehensive adaptations to product development, internal processes and governance. ESG also has a perceptible impact on M&A activities.
• In view of the regulatory framework, companies are calling for clear and practicable rules (in the area of reporting, for example) and for a reduction in formal burdens, but overall, they mostly want to see selective adjustments to the existing regulatory framework.

“ESG issues have become a core element of business and society. Achieving ESG-related targets is becoming increasingly important for the transformation of companies and business models,” says Professor Isabell Welpe (TU Munich), summarising the findings of the study. “The interviewees highlighted the significance of legislation and regulation in the ESG context: companies need a clear and reliable framework for ESG strategies and climate transformation in order to be able to plan on a company- and industry-specific basis,” adds Professor Marc-Philippe Weller (University of Heidelberg).

The study was presented at the Noerr Compliance Day in Frankfurt on 13 June 2024. After the presentation, the study findings were debated in a panel discussion with Dr Stephan Petri (GEA AG), Dr Doris Höpke (interviewee in the study and member of the Mercedes Group Supervisory Board), Professor Marc-Philippe Weller (University of Heidelberg), Dr Michael Brellochs (partner at Noerr and co-author of the study) and Christian Alexander Mayer (partner at Noerr and co-author of the study).

You can request the study by email.