ESG Analytics: Using Data

Analytics To Make Your ESG

Strategy A Reality

KEY TAKEAWAYS
ESG analytics is an emerging data science focused on helping companies
see how well they adhere to ESG initiatives.
ESG ratings are not yet universal, so it’s important to look at the
methodology to understand why a company received the rating it did
Your procurement department can help keep you in compliance with your
ESG strategy.

Environmental, social and governance (ESG) criteria measure an organization or

corporation’s sustainability and societal impact.

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In recent years, investors have become increasingly interested in putting their
money into companies considering ESG in their operations and decision-making.

Environmental: This pillar covers a company’s environmental policies

and practices. It includes things like reducing climate risk, emissions
reduction, resource conservation, and renewable energy use to help
address climate change.
Social: The social pillar covers a company’s policies and practices related
to human rights, diversity and inclusion, community engagement, and
employee relations.
Governance: The governance pillar covers a company’s leadership,
ethical practices, transparency, and accountability.

Taken together, these three factors make up a company’s “triple bottom line.” For
many years, businesses have focused primarily on their financial bottom line –
making money.

However, there has been a shift towards more sustainable and responsible
business practices in recent years.

This is where the triple bottom line comes in. To be successful in the 21st century,
businesses need to focus on all three of their bottom lines – not just their financial

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bottom line.

ESG Strategy and How Procurement Can

Keep You Compliant
ESG strategy is all about considering the impact of a company’s activities on the
environment, society, and governance. It’s about ensuring a company is
sustainable and responsible in its operations.

Many investors are now using ESG criteria to make investment decisions. They
want to invest in companies that are good stewards of the environment and
society. And they want to avoid companies involved in activities that could harm
the environment or society.

There are many different ways to implement an ESG strategy. But one common
approach is to set targets for improvement in the three areas – environmental,
social, and governance. Then businesses track their progress towards those
targets and report their progress publicly.

This helps to create accountability and transparency around ESG issues. It also
helps investors see which companies are making progress on ESG issues and
which are not.

Another key part of an ESG strategy is engagement with stakeholders. This means
talking to and working with groups interested in the company’s activities – such
as employees, customers, suppliers, community members, NGOs, etc.

The goal is to get input from these groups on how the company can improve its
performance on environmental, social, and governance issues.

There is no one-size-fits-all approach to implementing an ESG strategy. But by

taking into account the impact of its activities on the environment, society, and

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governance – and by engaging with stakeholders – a company can put itself on a
path to long-term success.

To comply with an organization’s ESG strategy, procurement must consider the

environmental and social impacts of the goods and services being procured. This
includes considering the product’s life cycle, from manufacture to disposal.

It also includes assessing the working conditions of those who produce the
product and the environmental impact of the production process itself.
Procurement staff can ensure strategy compliance by keeping these things in
mind when choosing products and suppliers working with responsible sourcing.

What ESG Analytics are and Why They’re

Important
ESG analytics is a tool used by investors to assess a company’s sustainability. ESG
analytics aims to evaluate a company’s impact on the environment and society
and its adherence to good governance practices. It involves collecting various
data sets and running analysis.

ESG analytics can be used to screen for companies that are likely to experience
financial risks due to environmental or social issues or to identify companies that
are leaders in sustainable business practices.

In recent years, there has been a growing interest in ESG investing, and ESG
analytics plays an important role in this form of investing.

ESG analytics can help investors make more informed investment decisions by
providing information about a company’s sustainability performance.

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ESG Ratings
ESG ratings, also known as ESG scores, measure a company’s or investment’s
impact on environmental and social issues and governance factors such as board
diversity. The ratings are provided by various organizations, including sustainable
investing research firms, stock exchanges, and rating agencies.

ESG ratings can be used by investors to screen companies and make more
informed investment decisions.

To receive a high ESG rating, a company typically discloses strong policies and
practices related to sustainability issues.

However, it is important to note that there is no uniformity in how ESG ratings

are calculated, and the criteria used may vary from one organization to another.
As such, it is important to research the methodology behind any ESG rating
before making investment decisions.

The Different Types of ESG Data

ESG data encompasses a wide range of information, from a company’s
greenhouse gas emissions to its employee satisfaction levels. This data can be
used to assess a company’s impact on the environment, social welfare, and
governance.

While all ESG data is important, some types are more commonly used than others.
For example, companies’ carbon footprints are often tracked, as are their water
usage levels and waste production.

However, ESG data can also include information on a company’s treatment of

employees, its ethical practices, and its charitable giving. By understanding the
different types of ESG data, investors can make more informed decisions about

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where to put their money.

How to Get Started with ESG Analytics

ESG analytics is a type of data analysis that helps organizations track and assess
their impact on key ESG indicators. While ESG analytics is relatively new, it is
already used by many businesses and investors to make more sustainable and
responsible decisions.

There are a few different approaches to ESG analytics, but the most common is to
use publicly available data to track an organization’s progress on various metrics
and key indicators.

This data can then be compared to industry benchmarks or other organizations’

data to identify areas of improvement. Additionally, many companies are now
beginning to collect their own internal data on ESG indicators.

The data sources and data quality heavily influence the results, and if you’re using
alternative data, you may not get the results you’re looking for. Many of today’s
data analytics tools allow for visualization, which makes it easier to get insights
from the data your company collects.

This data can be used to create custom benchmarks and track an organization’s
progress over time. Overall, ESG analytics is a powerful tool that can help
organizations make more informed and sustainable decisions.

The Benefits of Using ESG Analytics

ESG analytics is a way of measuring the sustainability and social impact of a
company or investment. ESG analytics considers various factors, including a
company’s emissions, water use, employee diversity, and human rights record.

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Not only can ESG analytics help investors decide if they want to work with a
company, but it can also help companies make sure they’re moving in the right
direction.

As more and more people become interested in sustainable investing, ESG

analytics is likely to become an increasingly important tool for measuring
corporate responsibility.

ESG isn’t something companies can afford to ignore anymore, and analytics
give them information in real-time, to help ensure they are headed in the right
direction.

Case Studies of Companies That Have

Successfully Implemented ESG Analytics
Many companies have successfully implemented ESG analytics. One notable
example is the French company Veolia.

In 2013, Veolia launched a “Responsible Solutions initiative,” which used ESG

data to help the company make better business decisions. The initiative was a
success, and Veolia was able to reduce its environmental impact and improve its
financial performance.

Another company that has successfully used ESG analytics is IBM. IBM has long
been a leader in corporate sustainability, using ESG data to inform its
sustainability strategy.

In 2011, IBM launched an internal carbon pricing program that used ESG data to
set prices for carbon emissions. The program was successful, and IBM reduced its
emissions by 16 percent in just two years.

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These examples show that ESG analytics can be a powerful tool for businesses
looking to improve their sustainability performance.

Tips for Making the Most out of your ESG

Analytics Strategy
The global pandemic has brought a new level of scrutiny to how corporations are
run. In response, many companies are turning to ESG analytics to track their
progress on key sustainability indicators.

However, simply collecting data is not enough – it is also important to know how
to use it effectively. Here are four tips for making the most out of your ESG
analytics strategy:

1. Set Clear Goals and Targets

What do you hope to achieve with your ESG data? Do you want to improve
your environmental footprint? Boost employee engagement? Or reduce
operational risks?

By setting clear goals, you can track your progress and identify areas
where you need to improve.

2. Choose the Right Indicators

Numerous indicators can be used to measure ESG performance. It is
important to select indicators and KPIs that are relevant to your company,
and that will give you the insights you need to reach your goals.

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3. Integrate ESG Data into Decision-Making
Data is only useful if it is used to guide decision-making. Ensure ESG data
is included in all relevant discussions, from strategic planning to everyday
operations.

This will help ensure that sustainability remains a top priority for your
company.

4. Communicate Your Results

Sharing your progress on ESG goals can create buy-in from employees,
investors, and other stakeholders. It can also help challenge others to do
better – ultimately leading to a more sustainable future.

Companies that utilize ESG analytics can make sound, evidence-based

decisions about their environmental and societal impact.

This, in turn, allows them to allocate resources effectively and create

lasting relationships with key stakeholders. To get started with ESG
analytics, consider all the factors involved and set achievable goals.

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Procurement Data Plays an Important
Role in ESG Analysis
You can invest in ESG reporting and data science tools to help you get ESG
insights. There are a few ESG solutions on the market today to help you get
started, but you don’t need to invest in ESG products to do it.

Start by keeping closer track of your procurement data across your supply chain.
The data goes a long way in showing you support for various ESG initiatives.

What’s your goal today?

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