Optimise your scoring on investor ESG assessments

It’s investor ESG assessment season. We support many of our clients to maximise their ESG assessment scores and whilst they all differ slightly there are five key things you can quickly do to boost your rating: 

1. Get your policies documented. Check what you’ve got in place against our Policy Checklist and draft new policies, or produce a standalone ‘Summary of ESG Policies’ document to summarise what you have and close any gaps. 

2. Measure your water and waste. If you’re an office-based services company these are likely to be very small but we find that investors still want them measured. The good news is that it should be straight forward to do. Water consumption can be readily extracted straight from your water bills. For waste, identify your regular waste collection (bin size, type e.g. general/recyclable, and collection frequency) and apply typical waste tonnages for your bin-size (we use Veolia’s information) to give a good-enough annual estimate. Even better, if your waste provider tells you the tonnage from their bills, use that. 

3. Measure your greenhouse gas (GHG) emissions. Nowadays we find most investors want their portfolio companies to measure scope 1, 2 and 3 GHG emissions but if you haven’t already measured these, it will be tough to do so within a month or two. Measuring just scope 1 and 2 emissions however is much more achievable and will be looked upon favourably by your investors as these are your most direct emissions. These emissions stem from your utility use and business travel in company owned/leased vehicles. Make sure you measure scope 1 and 2 emissions using both the location-based and market-based methods and contact us if you’d like help to do this. 

4. Be prepared with your people data. It’s standard for investors to ask about the size of your business in terms of people but the exact metric they use varies – some want full-time-equivalent (FTE) and some want headcount; some want data as at year end and some want the monthly average over the year. Be prepared to cater for these different options, and if you can, pull together data on employee turnover too. 

5. Understand your gender diversity profile. Pull together statistics for gender diversity across all employees, the board, and if you have time, at a senior management level too (the latter is commonly asked for but different investors define the scope of this in different ways). 

   
   

Taking these five steps will put you in a good place to get a solid score in any investor ESG assessment. If you want support with any of the above, or more tailored help to score well in a particular investor assessment, get in touch. 

Authored by Caroline Johnstone (the person, not AI).