Steps To Improve Your ESG Performance

Tracking ESG metrics

Environmental and sustainability accountability is growing rapidly, prompting organizations to adopt comprehensive ESG policies. A KPMG survey shows a 96 percent sustainability reporting rate for G250 companies – the world’s largest 250 companies – in 2020. This number is expected to increase in the coming years.

Companies aren’t the only ones incorporating ESG. According to EY, 91 percent of investors agree that non-financial performance is critical to investing decision-making.

Investors will often assess ESG scores and use other metrics and tools to evaluate a company’s ESG compliance before investing. As a result, companies must improve their ESG performance.

Steps to Improving ESG Performance

Here are some practical steps that can help you improve your ESG performance. They include:

Set Concrete Targets

A PwC survey shows that most consumers believe companies must develop a framework for the best ESG practices. The survey also revealed that 85 percent of employees prefer working for an employer that abides by its ESG principles. Incorporating ESG principles within an organization is easier if the changes are coming from the top. Senior leadership must buy into ESG principles and pass them on to employees. An excellent way to achieve this is by setting concrete Science-Based Targets.

Identify Material Topics

Tracking ESG performance is challenging. Organizations have to track an increasing number of ESG issues. Therefore, it’s crucial to have full disclosure on ESG topics that directly affect your business and industry. Conducting a materiality assessment can help you understand and identify material topics that you can address for better ESG performance.

Understand ESG Ratings

Retail and institutional investors look at ESG ratings frequently when investing. Research shows that 65 percent of institutional investors examine ESG ratings weekly to help their decision-making. It’s no secret that higher ESG scores can reduce capital costs. However, studies also show that companies with a higher ESG score get 15 percent more investment.

Organizations need to develop a framework to improve their ESG rating year on year. Engaging with rating agencies can also help you identify gaps and opportunities to improve your ESG performance.

Align to Frameworks

There has been a 92 percent increase in mandatory and voluntary ESG disclosure frameworks since 2000. Aligning to these global disclosure frameworks can help organizations achieve higher ESG performance.

Investors assessing ESG scores

Improve Your ESG Performance with Assistance from OWL ESG

OWL ESG provides data, indexes, and evaluation metrics and tools to institutional and retail investors, helping them make informed investment choices while helping the planet. We offer an array of ERG solutions and guidance on what best meets your specific needs.

Our core offerings include principle-based screening, cover ratings, raw data sets, ESG consensus services, fund-level analyses, and more. Partner with us to get customized solutions for your ESG data, standards, and regulatory reporting needs.

We also offer SFDR data solutions and TCFD analytics services to Asset Owners, Investment Product Issuers, Corporates, Asset Managers, Fintech Platforms, and Wealth/Investment Advisors and Brokerage Firms.