Key Takeaways
- Governance leads ESG risks: 45% of Corporate Affairs teams rank Governance as the top reputational risk area for their businesses, ahead of Environment, with Social consistently perceived as the lowest risk category.
- Sharp year-over-year shift: The share of Corporate Affairs leaders citing Governance as the highest reputational risk has risen from 29% in 2024 to 45% in 2026, while concern about environmental risks has declined from 39% to 27% over the same period.
- Evolving risk priorities: This reordering highlights rising concern over corporate ethics and accountability, while the relative downtick in Environment and the continued low ranking of Social suggest that these areas might be seen as more stable or manageable in the near term.
Why Is Governance Now the Top ESG Reputational Risk For Businesses?
GlobeScan’s 2026 Corporate Affairs survey reveals a notable reordering of perceived ESG risks. For the first time, governance-related issues have overtaken environmental concerns as the number one reputational risk for global businesses, based on how Corporate Affairs leaders rank the three pillars of ESG (Environment, Social, and Governance).
The data show that in 2026, nearly half of respondents (45%) identify Governance factors as the greatest reputational risk to their own companies. This marks a substantial increase from 2024, where a much smaller share (around three in ten, at 29%) had ranked Governance first. During the same period, the proportion of Corporate Affairs practitioners who considered Environmental issues as their top reputational threat fell from about four in ten in 2024 (39%) to fewer than one in three in 2026 (27%). Meanwhile, Social issues remain the lowest-ranked of the three categories, hovering around 30 percent of respondents, indicating little change in perceived risk from this area year over year.
The sharp rise of Governance as a reputational risk suggests that Corporate Affairs professionals are increasingly concerned about internal governance, ethics, and compliance-related failures, potentially driven by growing stakeholder scrutiny, regulatory pressures, and high-profile corporate governance lapses in recent years. Environment, which has long been the leading ESG concern, has seen a relative decline in urgency in the eyes of these leaders. This drop is striking given that climate change and environmental sustainability have dominated corporate risk agendas in the past. It may indicate that many companies feel that environmental issues, while still significant, are more understood or better managed than before, or that other emerging risks have temporarily pushed environment down the priority list. Social issues have consistently been rated as a lower perceived risk to reputation, which could imply that these issues (such as community impact, inequality, or workforce diversity) are viewed as less likely to generate immediate reputational crises. Alternatively, they might be undervalued amid louder global challenges.
WHAT DOES THIS MEAN?
For Corporate Affairs leaders, this new ranking of Governance, Environment, and Social as reputational risks underscores the imperative to strengthen governance practices as a core element of reputation management. With Governance now at the forefront, organizations may need to double down on internal ethics, transparency, and compliance, ensuring robust oversight and crisis protocols to prevent and respond to governance failures that can quickly erode trust. At the same time, despite the decline in relative environmental risk salience, environmental and climate issues remain a substantial potential threat to reputation and require continuous attention, especially as public and regulatory scrutiny on sustainability continues to evolve. Meanwhile, the persistently low ranking of Social factors could represent a blind spot. Social issues (from labor practices to diversity and community relations) may not appear urgent until they erupt, at which point they can be highly damaging. Balanced vigilance across all three ESG pillars is crucial because even as governance issues dominate current concerns, environmental and social risks can still escalate quickly.
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Survey Question: Please rank Environment, Social, and Governance from highest to lowest in terms of reputational risk to your business.
How This Insight Was Generated: This insight draws on GlobeScan’s Oxford–GlobeScan Global Corporate Affairs Survey, conducted between February and April 2026, with 294 Corporate Affairs practitioners across global markets.
