​Companies are opening their eyes to their obligations for action and disclosure on environmental, social and governance (ESG) issues, either as a response to investor demand, recognition of the risk mitigation benefits and opportunities, or because of financial impact. Understanding your ESG rating is key to staying one step ahead of your competitors. It shows how you compare in your industry and helps identify where you need to improve on ESG.

How does a strong ESG position create value?

Regardless of how ESG considerations currently factor into your strategy and operations, it doesn’t have to be difficult to make progress. It’s no secret that companies with strong ESG practices reap the rewards. It is becoming increasingly clear that strong company performance on ESG matters is closely aligned with increased investor interest and reduced risk. It can also help reduce costs, improve top-line growth, increase productivity and minimize legal intervention. Developing a strong ESG position is vital to the long-term success of your business.

Compare and keep pace

With ESG issues top of mind for investors, it’s important to know how your company’s position is perceived in comparison to investor favored standards and frameworks, as well as your sector peers. Many investors often make their investment decisions based on peer group comparison, so it’s important to ensure that your disclosures are up to standard. Benchmarking is not only useful in helping you keep pace, but it’s integral in helping you identify key areas for improvement. Studying industry leader best practices can assist you in managing and reducing ESG risks, while also highlighting new opportunities for success.

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