The ESG challenge
Environment, social and governance (ESG) is a key business priority, involving companies assessing their performance across ESG issues and reporting on their impact in these areas. ESG reports and ratings support investors’ assessment of a company and investing in businesses with sustainability-led goals.
ESG reporting is a growing requirement. Over 75% of Fortune 500 companies1 report on sustainability, while in Europe new reporting regulations will cover at least 45,000 companies2.
The challenge for companies
To meet ESG requirements, companies must collect a wide range of data across various topics to report on their ESG performance. A lack of reporting standards and varying requirements across ESG ratings providers, frameworks, and financial services companies can make it incredibly challenging for businesses to understand how to do this.
Companies may also need to balance ESG reporting alongside other demands such as complying with legislation, responding to consumer pressure, and conducting their own detailed sustainability initiatives - making ESG a complex area to respond to.
The key to meeting this challenge is having high-quality data, to report on and inform business decisions.
"I'm truly impressed by the amount of information available through Analytics. Sedex is definitely the 'El Dorado' [goldmine] of ESG data."
International FMCG member
Bloomberg estimates that ESG investment portfolios will reach $30 trillion in assets under management globally by 2025.
What gets measured gets managed
Data on a business’s operations, employees and supply chain is crucial for identifying and tackling social and environmental sustainability issues, and evidencing a company’s ESG impact.
Capturing the right data using effective assessment tools equips a company to achieve their ESG goals and supports other sustainability activities. Having this data brings many other business benefits, including more effective risk management and data-driven decisions.
How to prepare for ESG requirements effectively
Sedex has identified 10 core areas to collect data on that feature across many ESG frameworks. Companies can use this list to gather, track and analyse data efficiently to feed into multiple sustainability requirements.
We can support your business with gathering this data and achieving your sustainability goals. Our data platform and services provide a seamless solution for holistic ESG management and reporting, saving time through reducing duplication and effort.
Sedex tools enable businesses to collect, share and analyse relevant data at scale, build supply chain visibility, manage risk and measure progress to include in ESG reports – supporting your company to demonstrate tangible progress with credible evidence.
Common ESG frameworks
Global Reporting Initiative (GRI)
An open-source framework. Companies publish ESG reports using its requirements for raters such as Bloomberg to use for scoring.
S&P Global’s Corporate Sustainability Assessment and associated stock market indices
S&P Global invite companies to submit assessments and use these to place companies into one of three groups (the Dow Jones Sustainability Index, S&P ESG Indices, or “other”).
Carbon Disclosure Project (CDP)
A membership organisation and ESG framework, focusing on environmental issues only. Companies submit reports through CDP at investors’ requests.
Sustainability Accounting Standards Board (SASB) Standards
An industry-specific, open-source framework covering 77 industries, limited to reporting only on risks that are financially material to a business.
10 essential data points
Select a segment to learn more about the data points.
When reporting on these data points, cover a standard reporting period (the previous financial year) unless you have specific requirements to do something different.
Tip: Store operational and supply chain data on the same system for integrated analysis and reporting.
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