Why Is Your Company’s ESG Rating So Important

July 20, 2022
By CSE

As concern around sustainability grows, so does the importance of a company’s ESG rating. Knowing your company’s ESG score is invaluable.

 

Being aware of your sustainability rank within your sector helps indicate areas you can improve and drive your company in the right direction.

 

Being able to look at long-term risks and better prepare for the future gives you a leg up in your field, as well as being attractive to investors.

 

What is an ESG rating?

A company’s ESG rating is a measure of its exposure to long-term environmental, social, and governance risks. It is an evaluation of the level of sustainability that a company works under. It compiles factors ranging from emissions and energy use, to workplace diversity and community relations, to executive compensation and accounting practices.  

 

How, and by who, is this score calculated?

Consulting firms and rating agencies that specialize in ESG scoring are making these calculations. Data gathered from a variety of sources are employed to calculate the score. Frameworks such as GRI, SASB, and SDGs, through which companies make voluntary disclosures, offer invaluable data for score calculations. Using algorithms and data analysis techniques, firms calculate these scores.

 

Why do these scores matter?

As demand for sustainability increases and new legislation is created, there needs to be a standardized way to assess a company’s ESG performance. These scores help not only investors, but the company itself understand the ESG risks involved and where they can improve. A high ESG score makes a company more receptive to anticipating not only long-term risks, but also future opportunities. These scores prove to be useful in benchmarking when internally analyzing sustainability performance. There is no doubt that the benefits of ratings go far beyond the score itself, but this is only if the company seizes the opportunity to evaluate their performance using these ratings. An ESG rating provides an open door for a company to drive towards innovative and progressive goals. 

 

Where to start… 

Your company’s ESG data and disclosures are the gateway to finding and improving your ESG rating. CSE has been helping companies set ESG targets and create an action plan for the past 16 years. To learn how to improve your company’s ESG score, attend our next US Certified Sustainability (ESG) Practitioner Program, being held on September 22, 23 & 26 or the Leadership Version on October 27, 28 & 31 with a focus on Canada.

 

For more information, please reach out to us as [email protected]

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Upcoming Programs: Certified Sustainability (ESG) Practitioner Program, Advanced Edition 2022.

         
 Location: Digital Date: September 22, 23 & 26
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           For more information & discounts contact us at [email protected]

 

 


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