An ESG score serves as a wake-up call, reminding board members of their ESG responsibilities, where risks and opportunities exist, and how they compare to the industry as a whole. Apart from determining its ESG stance, there are other explanations for why a corporation needs an ESG Data And Analytics. Maybe the most notable trend is the increasing growth of ESG investing, with investors followed by sustainable asset portfolios. With a demonstrated link between high performance on material ESG concerns and financial success, institutional and individual investors utilize ESG ratings to select firms likely to provide attractive returns.
These ESG ratings are intended to assist investors in identifying and comprehending a company’s financially relevant ESG risks. Companies are assessed using publicly accessible data, such as media stories and annual reports, with scores assigned for each material ‘E,’ ‘S,’ and ‘G’ item and an overall score. Investors use these proprietary ratings as a proxy for ESG performance. Companies that do well on ESG indicators are regarded to have a superior means of predicting opportunities and risks, be much more receptive to long-term strategic thinking, and be laser-focused on long-term value generation.
Summary Yesterday’s business leaders focused on beating quarterly profit targets.
Tomorrow’s successful business leaders will focus on sustainable profits.
Public anger at the lack of action on climate change, corruption, income inequality, tax avoidance, and other social ills makes it harder for CEOs to ignore sustainability.
The reluctance of many CEOs to fully engage with sustainability can be attributed to the age-old view that it will hurt profits.
However, according to GlobalData's research, companies that embrace all three elements of sustainability will outperform their peers.
CEOs that are too slow to improve their company’s approach to sustainability will see an exodus of customers and a drop in profits far sooner than they ever imagined.
