Stakeholders are no longer solely interested in financial data, and businesses are under increasing market pressure to deliver on new reporting obligations.
Investors are looking to ESG as a means to figure out which companies are actually capable of weathering existential threats. A good ESG benchmarking tool can assist decision-makers in developing an ESG reporting framework that will provide them with the competitive advantage they seek.
ESG benchmarking tools help decision makers understand:
1. Whether their corporate sustainability strategies are effective
An ESG benchmarking tool can reveal whether your company’s sustainability plans are effective. By creating and implementing a profitable and long-term business strategy and reducing the company’s sustainability risks, expectations and needs of investors and stakeholders are met. An ESG benchmarking tool helps you get internal and external acknowledgement for your commitment to sustainability, while also incorporating sustainability into the company’s DNA.
2. Ways to improve performance
An ESG benchmarking tool can help you identify areas where you may need to enhance your performance and illustrate the positive impact of corporate sustainability strategy on your bottom line.
3. Corporate sustainability strategies impact on financial results
Based on your Corporate Sustainability Assessment (CSA), an ESG benchmarking tool can give you a visual of your company’s sustainability performance patterns.
4. Competitive position
An ESG benchmarking tool provides you with information about your own competitive position in comparison to your peers, as well as the most effective levers for improvement.
5. Levers for improvement
ESG benchmarking tools can serve as a reliable source of data for internal change agents, as well as highlighting areas of risk and opportunity.
6. How to improve communications needs and goals
ESG has progressed from just exhibiting social responsibility to displaying a clear and methodical response to the risks and opportunities you face in a rapidly changing world. It’s vital to be open with your clients and to demonstrate your systematic methods in a way that’s both engaging and easy to understand. ESG benchmarking tools can help decision makers improve communications needs and goals.
As more global regulators and governments enforce ESG disclosures, proactive action and transparency on ESG issues can help companies safeguard their valuations. ESG benchmarking tools expose a company’s perceived risks and opportunities in terms of their sustainability strategy and programmes, as well as how they compare to the rest of the industry. The plethora of data gathered under each ESG pillar may then be strategically leveraged to guide a company’s strategy and disclosure, boosting not only ESG ratings but also overall performance and profitability.