October 14, 2021


Survey indicates enhanced business opportunities for firms that position themselves to adapt to stakeholders’ shifting priorities

CHICAGO --The growing importance of environmental, social and governance (ESG) issues has reached an inflection point in the middle market as significantly more executives at these firms report being familiar with ESG and having adopted formal ESG plans, according to the RSM US Middle Market Business Index (MMBI) ESG Special Report released today by RSM US LLP (“RSM”) in partnership with the U.S. Chamber of Commerce. In the third quarter of 2021, 69% percent of middle market executives reported being very familiar or somewhat familiar with using ESG criteria to evaluate performance, which is a 30-percentage-point increase from 39% in the fourth quarter of 2019.

Middle market businesses are taking action too, as 66% of those respondents who are aware of ESG and support such causes said their organization had formal plans regarding commitments to ESG initiatives. Among those respondents, 32% indicated environmental issues were a cause included in those plans – making it the top-ranking issue included in the survey.

“It is in the economic interest of the U.S. economy in general—and business interest of middle market firms, in particular—that the integration of ESG practices into their core operations becomes essential,” said Joe Brusuelas, RSM US LLP chief economist. “Organizations can no longer wait and hope for the best. They need to act decisively and prepare for a different regulatory framework while shaping market-driven demands going forward.”

The report findings also indicate that larger middle market companies ($50 million to $1 billion in annual revenue) are ahead of smaller organizations ($10 million to $50 million in annual revenue) when it comes to ESG familiarity, adoption of formal plans and using ESG criteria to evaluate performance.

Addressing Environmental Concerns Presents Business Opportunities

Further illustrating their commitment to ESG initiatives, nearly half of survey respondents—48%—stated that their organization was either acting to reduce its net carbon emissions to zero or had already reduced such emissions to zero. When examined by size cohort, this figure was 66% for larger middle market organizations and 23% for smaller companies.

Overall, 20% of respondents said climate change presents significant opportunities over the next three years and 28% of respondents said climate change presents significant challenges, while 27% said it presents both significant opportunities and challenges.

RSM’s analysis indicates that a clear commitment to ESG can help businesses stand out and attract talent. In terms of enhancing their ability to attract and retain workers, 58% and 57% of respondents—respectively—said climate change presents opportunities, either now or in the future, to some extent or to a great extent.

“The pressure to support ESG initiatives is mounting from a variety of stakeholders, including customers, employees, industry peers and regulators,” said Anthony DeCandido, partner and financial services senior analyst with RSM US LLP. “As such, we expect plans to take on even greater importance in business operations and to have a bigger impact on financial performance. These plans have proven to be good for business and society overall.”

Increased Focus on Reporting Indicates ESG No Longer A “Nice to Have”

Results from RSM’s survey show the use of metrics to measure success around ESG goals has grown over the last two years, indicating that ESG is becoming a central pillar interwoven throughout companies’ operations. Among respondents whose organizations are aware of ESG and support such causes, the share who said their companies use ESG measures to a great extent to evaluate their performance increased to 36% in the third quarter of 2021 from 26% in the fourth quarter of 2019.

Of the respondents who said they use ESG to a minor extent, to some extent or to a great extent to evaluate performance, 77% said their organization provides external reporting on ESG performance, and 65% are attempting or have attempted to gauge the broader potential impact that achieving ESG goals has on the environment or society. Sixty-six percent said their organizations have dedicated senior executives whose primary responsibilities include establishing and achieving ESG visions.

Other ESG Initiatives Included in Middle Market Organizations’ ESG Plans

While environmental issues lead the way among a diverse list of ESG issues and causes, fair trade and/or sourcing, community health and wellness, and educational support initiatives were the next highest-ranking options that executives stated including in their ESG plans. Other causes included gender equity, support for the LGBTQ community and racial justice.

Of the respondents somewhat familiar or very familiar with ESG, 78% said they include diversity and inclusion policies in the initiatives they report on externally, 59% said they include ethnicity pay gap initiatives in such reporting and 55% include gender pay gap initiative information.

“Organizations that want to further develop their ESG framework should consider performing an assessment of the business to see where its ESG priorities stand,” DeCandido said. “While the upfront investment may be daunting, the price of ignoring ESG demands far outweighs the cost of implementing a strategy around these issues. Executives who feel overwhelmed at the breadth of ESG issues and how to address them may want to begin by focusing on manageable, short-term goals that can help build momentum.”

The survey data that informs this index reading was gathered between July 8 and July 26, 2021.

About the RSM US Middle Market Business Index

RSM US LLP and the U.S. Chamber of Commerce have partnered to present the RSM US Middle Market Business Index (MMBI). It is based on research of middle market firms conducted by Harris Poll, which began in the first quarter of 2015. The survey is conducted four times a year, in the first month of each quarter: January, April, July and October. The survey panel consists of 700 middle market executives and is designed to accurately reflect conditions in the middle market.

Built in collaboration with Moody’s Analytics, the MMBI is borne out of the subset of questions in the survey that asks respondents to report the change in a variety of indicators. Respondents are asked a total of 20 questions patterned after those in other qualitative business surveys, such as those from the Institute of Supply Management and National Federation of Independent Businesses.

The 20 questions relate to changes in various measures of their business, such as revenues, profits, capital expenditures, hiring, employee compensation, prices paid, prices received and inventories. There are also questions that pertain to the economy and outlook, as well as to credit availability and borrowing. For 10 of the questions, respondents are asked to report the change from the previous quarter; for the other 10 they are asked to state the likely direction of these same indicators six months ahead.

The responses to each question are reported as diffusion indexes. The MMBI is a composite index computed as an equal weighted sum of the diffusion indexes for 10 survey questions plus 100 to keep the MMBI from becoming negative. A reading above 100 for the MMBI indicates that the middle market is generally expanding; below 100 indicates that it is generally contracting. The distance from 100 is indicative of the strength of the expansion or contraction.

About The U.S. Chamber of Commerce

The U.S. Chamber of Commerce is the world’s largest business organization representing companies of all sizes across every sector of the economy. Members range from the small businesses and local chambers of commerce that line the Main Streets of America to leading industry associations and large corporations.

They all share one thing: They count on the U.S. Chamber to be their voice in Washington, across the country, and around the world. For more than 100 years, we have advocated for pro-business policies that help businesses create jobs and grow our economy.


RSM’s purpose is to deliver the power of being understood to our clients, colleagues and communities through world-class audit, tax and consulting services focused on middle market businesses. The clients we serve are the engine of global commerce and economic growth, and we are focused on developing leading professionals and services to meet their evolving needs in today’s ever-changing business environment.

RSM US LLP is the U.S. member of RSM International, a global network of independent audit, tax and consulting firms with 48,000 people across 120 countries. For more information, visit, like us on Facebook, follow us on Twitter and/or connect with us on LinkedIn.