ESG Book Analysis Shows Companies Insufficiently Disclosing Industry-Relevant Metrics Despite Global Increase in Sustainability Reporting
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- Research coincides with the launch of the firm’s ESG Performance Score, a data-driven assessment of corporate sustainability performance inspired by International Sustainability Standards Board (ISSB) standards.
- ESG Book’s analysis reveals that European companies lead global peers on ESG performance, but are falling behind on the disclosure of financially material, industry-led sustainability data.
- With markets demanding better ESG data to meet increasingly complex sustainability requirements, the ESG Performance Score is the most sophisticated new tool of its kind.
- Covering nearly 10,000 companies globally, the ESG Performance Score provides in-depth, real- time insights into material areas of sustainability performance.
- With a fully transparent methodology, the ESG Performance Score uniquely enables clients to click from each company’s score to raw data and source documentation, with point-in-time history for time series analyses.
ESG Book, a global leader in sustainability data and technology, released new analysis showing that financially material, industry-relevant ESG disclosure levels remain low, despite a widespread increase in overall sustainability reporting.
The research coincides with the launch of the firm’s new ESG Performance Score, a transparent, data- driven assessment of corporate sustainability performance inspired by International Sustainability Standards Board (ISSB) standards. Published in June 2023, the ISSB’s long-awaited new standards mark a significant global shift in financially relevant sustainability disclosure, and are seen as a new global baseline for capital markets.
ESG Book’s analysis reveals that European companies currently lead global peers on sustainability performance, led by corporations in France with an average ESG Performance Score of (54.9). By comparison, U.S.-based companies on average have a score of 50.1, with Japanese companies scoring on average 49.5.1
On a global scale, European corporations also demonstrate the highest levels of overall ESG disclosure, as the reporting landscape is rapidly shaped by emerging regulation including the EU Taxonomy and Corporate Sustainability Reporting Directive (CSRD). Recent ESG Book analysis revealed that worldwide ESG regulations have increased by 155 percent over the past decade.
However, while European companies perform strongly in the overall disclosure of ESG-based metrics, there is a noticeable drop in their reporting of industry-relevant sustainability data. This is information that is more likely to impact the enterprise value of a corporation, and is required by investors and financial institutions for more accurate insights into material areas of sustainability performance.
ESG Book’s new solution has been developed as a response to many of the current market challenges around sustainability ratings, including opacity around score methodologies and underlying data, a lack of standardisation, and the limited ability to measure industry and sector-specific metrics.
See related article: ESG Book Launches Corporate ESG Dashboard
Covering nearly 10,000 listed companies worldwide, the ESG Performance Score provides an in-depth, real- time assessment of corporate sustainability through separate analytics on performance and disclosure, with more than 450 standardised and derived ESG and emissions metrics applied to each company.
With a fully transparent methodology, enabling financial institutions and corporates to gain access to the score’s framework, data mapping and calculations, the ESG Performance Score uniquely allows clients to click through from the score-level to the underlying raw data and source documentation. ESG Book’s solution incorporates sector specific materiality, and provides point-in-time history for time series analyses.
Dr Daniel Klier, CEO of ESG Book, said: “We are transitioning from a world of simplistic and opaque ratings to an increasingly more advanced sustainability data landscape, and moving on from the past when a single score would be used to explain how a company is performing on ESG and climate issues.”
“ESG Book is leading this transformation by delivering fully transparent, traceable ESG data that is aligned with latest industry standards, and which provides a more sophisticated view of financially-material corporate sustainability performance.”
“With the launch of the ESG Performance Score, we are empowering investors and corporates with a more accurate tool to determine financially material ESG risks and opportunities, and greater transparency to enable more sustainable outcomes.”
Delivered through ESG Book’s market-leading platform, the ESG Performance Score is available as two options: ‘Core’, which is a point-in-time score measuring corporate sustainability performance based on publicly available data, and ‘Plus’, which includes an overlay of media and NGO coverage to account for the public perception of a company’s performance.
The ESG Performance Score can be used for a broad range of investment, research, and engagement purposes, including fundamental analysis, portfolio screening, and benchmarking.