The New Oil
ESG reporting has faced massive growth and increasing reputational issues, including greenwashing, in the last few years. Critics claim poor transparency, a lack of accuracy, and the inability of companies to commit to long-term accountability. Recent headlines have brought this ever more into the fore, including the UK advertising watchdog, ASA, holding HSBC to account for misleading consumers with their advertised sustainability commitments, and Brewdog losing its B Corp status less than two years after gaining the certification after several back-to-back controversies.
However, the pressure from shareholders, stakeholders and regulation – such as the FCA’s commitment to tackle greenwashing with ESG-labelled funds – is only increasing for public companies and SMEs to state significant climate, environmental and social goals, intent and progress. Because of this, 99% of public companies expect to invest in ESG Reporting Technology and Tools over the next 12 months (Deloitte).
The ESG measurement market has developed rapidly, becoming extremely competitive. Until now, the options have been split into two – public and private companies. For public companies, there is a myriad of web-scraped and secondary data-led scores which consider less the sustainability of an organisation and more the reaction of the market to its sustainability claims. And for those not listed, the landscape is awash with ESG badges or stamps of validation, most of which are industry, geography or theme specific with little to no comparability across the board.
In addition, the focus has been on historical data, and companies have been assessed or rated purely based on what they have done in the past. These certifications are usually valid for 2-3 years post-assessment and provide little detail other than validation that the company is ‘approved’ or ‘certified’. And, as we all know, past performance does not guarantee future results.
The pressing need for all companies to play their part in becoming more sustainable and equitable requires a more innovative, data-led and future-focused approach.
Unlike other ESG rating vendors, FuturePlus, is the only intuitive platform that makes managing social and environmental impact accessible, achievable and trackable. Companies can evidence their current position, state their intent, and intelligently track their improvement through clear indicators within defined timeframes. As a knowledge-based intelligence leader, FuturePlus qualifies a company’s achievements into a trackable sustainability roadmap before quantifying them. Its indicators made up of 200-300 questions, educate companies and business leaders to consider the practicality of sustainability in a balanced way.
Key to the methodology is to provide a granular breakdown of achievement and intent across five themes (Climate, Environment, Diversity and Inclusion, Economic and Social) as well as an aggregate score.
This allows companies to create a balanced approach to sustainability that recognises many of the trade-offs and interdependencies that exist in sustainability, and be recognised for doing the most they can under the pillars they have the greatest opportunity to impact upon. Rather than ‘sustainable or not’ – a line that is tricky to draw, as companies such as BrewDog have found out – ESG needs to have a constant, dynamic tracking of social and environmental impact.
This is particularly important for small to medium-sized enterprises that make up 99% of the UK economy, which may not have existed long enough to build a compelling evidence base of past behaviour, and who will most likely want to represent their intent around sustainability to investors and customers. By placing all the incentives on improvement, we help set the conditions for future success, not mark the card of past achievements.
Due to the comparable nature of the ESG data, FuturePlus is designed to provide investors with a clear, quantifiable and comparable ESG score for all of its investee companies and for its portfolios. Investors can group companies into funds and portfolios, understand each investee firm’s score, and demonstrate the ESG rating of each investment and fund in verifiable terms.
The quote’ data is the new oil’, generally attributed to the mathematician Clive Humby, has been doing the rounds for nearly two decades; however, most importantly, as with most misquotes, the second part is arguably the most important.
‘Like oil, data is valuable, but if unrefined, it cannot really be used.’
ESG data for too long has been focussed on past actions, has been unrefined and has caused confusion and a lack of clarity. By capturing intent and holding organisations accountable to make the changes they state, as well as providing the support, tools and knowledge to create a more positive impact, FuturePlus allows companies to make the steps vitally needed for a more equitable and sustainable economy (or world).
Alexandra Smith
Co-Founder of FuturePlus, part of The Sustainability Group
FuturePlus is a sustainability management platform that makes managing social and environmental impact accessible, affordable, achievable and trackable for every business, not just the 1%.
FuturePlus qualifies a company’s sustainability achievements before quantifying and translating them into a realistic and trackable action plan. Its indicators made up of 200-300 questions, educate companies and business leaders to take practical, incremental steps towards sustainability by focusing on five pillars: Climate, Economic, Diversity & Inclusion, Social and Environment. Its plans transparently align with all 17 of the UN’s Sustainable Development Goals.
Based in London, UK, its workforce is 66% female (compared to Deloitte’s global benchmark of 33% in tech companies).
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