ESG Readiness Assessment

Answer just eight short ESG-related questions to determine if your company is on the right track to building a winning ESG program.

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Is ESG a priority for your leadership?

ESG Insight

ESG has become a top priority for leadership teams at many companies.

78% of executives said that ESG is a “significant” or “very significant” priority for their companies, up from just 46% in 2019.

As the business case for ESG continues to strengthen, we can expect to see even more companies recognizing the importance of sustainability, social responsibility, and ethical governance practices and integrate them more fully into their strategies and operations.

Source: Mckinsey
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How does your company manage ESG today?

ESG Insight

A majority of corporate directors now recognize the need to address ESG issues and implement ESG programs.

87% of US public company directors reported that their board has oversight over ESG issues, up from 72% in 2019. Additionally, 63% of the directors surveyed said that their companies have an ESG program in place.

Companies that implement ESG programs can better manage risks, enhance their reputation, and drive long-term sustainability, which can in turn benefit all stakeholders, including investors, employees, and customers.

Source: NACD
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Is ESG important to your stakeholders?

Customers, investors, employees, etc.
ESG Insight

ESG considerations are growing in importance for a wide range of stakeholders, including consumers and investors, in addition to regulators and employees.

60% of global consumers now consider a company’s environmental and social impact when making purchase decisions and 71% of investors believe that companies should prioritize ESG issues.

Companies that prioritize ESG issues are more likely to be viewed positively by their stakeholders, which can lead to increased brand loyalty, stronger financial performance, and stronger long-term sustainability.

Source: Edelman
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Does your company measure Scope 1 and 2 Greenhouse Gas (GHG) emissions?

ESG Insight

Measuring and reporting GHG emissions is increasing in importance for companies.

89% of S&P 500 companies reported measuring their Scope 1 and 2 GHG emissions in 2021, up from 85% in 2019. In addition, 53% of these companies have set science-based emissions reduction targets, which align with the goals of the Paris Agreement.

Companies that embrace GHG emissions reporting and reduction are better positioned to manage environmental risks and take advantage of new business opportunities in the transition to a low-carbon economy.

Source: CDP
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Does your company measure Scope 3 GHG emissions?

ESG Insight

For the majority of companies, Scope 3 emissions is by far the largest emissions source (on average, it can be a whopping 11X larger than Scope 1 and 2 emissions combined.)

Only 38% of S&P 500 companies reported measuring their Scope 3 GHG emissions in 2021.

There is a significant opportunity for companies to take a more comprehensive approach to GHG emissions management. Companies that measure and manage their Scope 3 GHG emissions can improve their overall ESG performance, reduce their carbon footprint, mitigate supply chain risks, and build resilience in the face of climate change.

Source: CDP
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Do you track or measure any specific ESG metrics?

e.g., DE&I initiatives, climate-related targets, product footprint, etc.
ESG Insight

You can’t manage what you don’t measure! There is growing importance among companies to track and measure their performance against specific ESG targets.

90% of S&P 500 companies have now published sustainability or corporate responsibility reports, which often include ESG targets, goals, and performance indicators. 86% of reporting companies had set specific sustainability targets in 2020, up from 81% in 2019.

By setting ambitious ESG goals and publicly reporting on progress, companies can demonstrate their commitment to sustainability, social responsibility, and ethical governance practices, as well as attract investment and talent from stakeholders who prioritize these issues.

Source: GA Institute
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Have you identified your company’s climate-related risks?

ESG Insight

Climate change is expected to have widespread and severe economic impacts, which will affect many companies across different sectors.

Up to 70% of companies in some sectors could be exposed to physical risks from climate change, such as extreme weather events, sea-level rise, and drought. In addition, almost all companies are likely to face transition risks as the world shifts towards a low-carbon economy, such as policy changes, technological disruptions, and shifts in consumer preferences.

With the upcoming SEC climate-related risk disclosure regulations, companies that are exposed to physical and transition risks may need to identify, manage, and report on those risks in order to remain in compliance with US law. Moreover, addressing climate risk can also create opportunities for companies to innovate, improve their resilience, and build a more sustainable future.

Source: FSB TCFD
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Have you ever reported on your ESG efforts to partners, investors, customers or reporting agencies?

ESG Insight

Growing demand for ESG reporting from investors, regulators, and other stakeholders is driving more companies to embrace ESG reporting as a tool for managing risks, building reputation, and improving long-term sustainability.

In 2020, over 80% of the world’s 250 largest companies disclosed their sustainability performance. Additionally, the number of companies reporting on ESG issues has grown each year, with CDP’s 2021 report finding that 10,000 companies, cities, states, and regions disclosed through its platform, up from 8,400 in 2020.

While ESG reporting is not yet required in the US, there are many global reporting standards and frameworks that companies can follow, including the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), and the Task Force on Climate-related Financial Disclosures (TCFD), among others. By adopting these frameworks, companies can standardize their reporting practices and provide stakeholders with a more consistent and comprehensive view of their ESG.

Source: CDP

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