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. While each assessment differs slightly, there are five key actions you can take to boost your rating.

1. Get Your Policies Documented

First, check what you have in place against our Policy Checklist. Draft new policies as needed. Alternatively, create a standalone ‘Summary of ESG Policies’ document. This will summarise your existing policies and help close any gaps.

2. Measure Your Water and Waste

If you’re an office-based services company, your water and waste impact may be small. However, investors still want these metrics measured. The good news is that this should be straightforward. You can extract water consumption directly from your water bills.

For waste, identify your regular waste collection details, such as bin size, type (general or recyclable), and collection frequency. Apply typical waste tonnages for your bin size. We use Veolia’s information to provide a good annual estimate. If your waste provider can give you the tonnage from their bills, use that for more accuracy.

3. Measure Your Greenhouse Gas (GHG) Emissions

Most investors now expect portfolio companies to measure scope 1, 2, and 3 GHG emissions. If you haven’t measured these yet, it may be challenging to do so quickly. However, measuring just scope 1 and 2 emissions is much more achievable. Investors will view this favourably, as these are your most direct emissions.

Scope 1 and 2 emissions come from your utility use and business travel in company-owned or leased vehicles. Ensure you measure these emissions using both location-based and market-based methods. If you need assistance, contact us.

4. Be Prepared with Your People Data

Investors typically ask about the size of your business in terms of personnel. However, the exact metrics can vary. Some may request full-time equivalent (FTE) data, while others prefer headcount. Some might want year-end data, while others look for the monthly average over the year.

Be ready to provide these different options. If possible, gather data on employee turnover as well.

5. Understand Your Gender Diversity Profile

Gather statistics on gender diversity across all employees, the board, and, if time allows, at the senior management level. Investors often request this information, but definitions of senior management can vary.

Conclusion

Taking these five steps will position you well for a solid score in any investor ESG assessment. If you want support with any of the above or tailored help for a specific investor assessment, get in touch.

Additional Considerations for ESG Success

The Importance of ESG in Business

Understanding the significance of ESG (Environmental, Social, and Governance) practices is crucial. These practices not only enhance your reputation but also attract investors who prioritise ethical growth.

Integrating ESG into Your Business Strategy

To truly benefit from ESG initiatives, integrate them into your core business strategy. This means aligning your operational goals with sustainability objectives.

Continuous Improvement in ESG Practices

ESG is not a one-time effort. It requires ongoing evaluation and improvement. Regularly review your policies and practices to ensure they meet evolving standards and investor expectations.

Engaging Employees in ESG Initiatives

Engaging your employees in ESG initiatives can foster a culture of sustainability within your organisation. Encourage them to participate in sustainability training and initiatives.

The Future of ESG Assessments

As the focus on sustainability grows, ESG assessments will become even more critical. Stay ahead of the curve by continuously improving your practices and adapting to new standards.

Taking these steps will not only prepare you for assessments but also position your business as a leader in sustainability.

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