ESG Benchmarking

AlphaSense Is the Leading ESG Benchmarking Tool for Corporate Professionals

Whether you are a business leader looking to strengthen your company’s operational performance, curb future non-compliance issues, or improve managerial oversight on emerging ESG risks, AlphaSense can help you cover all your bases and gain a competitive advantage.

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Environmental, Social, and Governance (ESG) practices are now ubiquitous in any organization’s business strategy. Centering around eco-conscious and ethical corporate policies that reflect shareholders’ interests and provide transparency to investing parties, the three pillars of ESG reflect a company’s commitment to environmental sustainability, social responsibility, and good governance.

Today, more and more investors are incorporating ESG into their investment and acquisition strategies. Companies are increasingly being appraised—and compared against each other—on the basis of their commitment to ESG practices.

It has never been more important for companies to prioritize their ESG performance or incorporate ESG into their competitive and growth strategies.

FAQs

What is ESG Benchmarking?

ESG benchmarking is the process of a corporation measuring its ESG performance and disclosure against its peers within the same industry. Business leaders need to have a clear understanding of company and industry-wide ESG issues, as well as how to address them, in order to answer to stakeholders, maintain their company’s reputation, and stay on the competitive edge.

Having a deep understanding on how their company’s ESG performance stacks up against their competitors’ is crucial in unlocking areas of opportunity and to be prepared for tough questions from stakeholders. Key ESG issues such as commitment to the renewable energy transition and lowering carbon emissions, human capital and business ethics, and fair governance are top of mind for most stakeholders and consumers, which means they need to be top of mind for corporations as well.

ESG Benchmarking Challenges (and Solutions)

More and more corporations are recognizing the value of ESG benchmarking, and yet most are encountering similar obstacles in the process. Below are a few common challenges business leaders face when benchmarking, particularly when they do not have an all-in-one market intelligence platform with artificial intelligence (AI) based search functionality .

Fragmented Data Sources

There is currently no standardization of ESG reporting, meaning there is no central database that houses all relevant information for ESG benchmarking. This forces professionals into a reactive process of pulling together disparate data (often behind paywalls and content gates) and incoherently stitching together narratives all on their own. This approach inevitably leads to missed insights and the inability to reliably validate any potentially relevant findings.

However, when you utilize a platform with aggregated content access—everything from earnings transcripts and ESG reports to company presentations, broker research, and expert calls—you can see the full landscape of available ESG data all at once. From there you can easily validate insights using different sources and increase confidence in your research.

Lack of Productivity and Too Much Time Wasted

The problem with manual research—the kind that does not rely on the power of AI and NLP—is that you end up severely limiting the speed and scope of your research.

Manually parsing through pages and pages of a document just to potentially find a needle in the haystack, all to then repeat the same process for every new source is inefficient, exhausting, and woefully subject to human error. Moreover, spending too much time on search efforts alone leaves little time for the high-value tasks of analysis and strategy building.

AI search capabilities—thematic search, synonym recognition, company tearsheets, and more—help you find all the information you are seeking faster and surface insights you may not have even known to look for. These capabilities are key in maintaining a productive research workflow. These tools give you your time back, so that you can do more with less.

Outdated Information Sources

The ESG landscape is constantly shifting. Most legacy platforms do not reflect the current state of ESG because they lack sufficient information on emerging ESG trends. Particularly for the energy sector and the energy transition, it’s imperative to rely on data sources that are up to date and accurately portray the current state of ESG.

With a market intelligence platform that constantly updates its data sources with the most current documents and reports, you never have to worry about antiquated insights or falling behind the competition again.

AlphaSense for ESG Benchmarking

AlphaSense allows professionals to easily benchmark ESG goals and evaluate peer strategies by aggregating access to critical ESG information sources—indexed, searchable, and all in one place. Here’s how:

One Platform for All ESG Research

By offering aggregated access to all four key perspectives of market research, AlphaSense enables you to understand your peers’ goals and their strategies for meeting those goals, so that you can adapt your own ESG strategies accordingly.

Here is how each of the four perspectives play into ESG research:

Company – Go straight to the source to see how companies are reporting on their ESG initiatives; gain access to disclosures and presentations covering 26,000+ companies
Analyst – Hear from top Wall Street firms (including Morgan Stanley, Bank of America, Goldman Sachs, and more) about ESG investments, outlooks, and company evaluations
Journalist/Regulatory – Proactively monitor regulatory and reporting groups such as GRI, as well as 145+ top ESG-focused news and trade journals
Expert – Get access to 28,000+ first-hand perspectives of past executives, partners, and customers on ESG strategy, the cost of sustainability, and ESG market leaders

You can also create customizable dashboards on the AlphaSense platform to help you proactively monitor the companies, industries, or trends that are most important to you. These dashboards automatically populate with new content on selected search topics to ensure you are always in the know.

Speed Up Time to Insight

AlphaSense incorporates powerful AI search technology, eliminating manual research tasks and enabling you to craft ESG goals and strategies faster. Our smart search capabilities give you back more time for high-level analysis and strategy in the following ways:

Thematic Search – accelerates your research process 5-10x, enabling you to find new technologies or target acquisitions
Real-Time Alerts – ensure you never miss a critical peer, industry, or market update again
Smart Synonyms™ – enable you to filter through the noise faster by understanding the core of your search intent and surfacing only the most relevant results (e.g. when you search “emission reduction” the platform will also surface results for “Scope 1”, “greenhouse gas emissions”, “customers’ emissions”, etc.)

Exclusive Insights You Won’t Find Anywhere Else

AlphaSense bypasses standard paywalls, giving you instant access to all the proprietary and premium content you need to effectively conduct your ESG research. With these exclusive sources, you can validate your findings and back your ESG strategy with Wall Street and industry expert perspectives:

Wall Street Insights® – the only collection of broker research available to the corporate market with access to perspectives from 1,000+ sell-side and independent firms
Expert Insights – provides instant access to 35,000+ interviews with thought leaders, former executives, partners, customers, and other experts

Frequently Asked Questions

What are the typical ESG benchmarks to look at?

The most typical ESG benchmarks are ESG ratings, which are given by rating agencies. These agencies create unique in-depth assessments to score organizations based on various ESG factors. Some of the most well-known rating agencies include CDP, Sustainalytics, and GRI (all of which have reports housed on the AlphaSense platform).

The right benchmarks will provide insight into which ESG themes and topics are important to your competitors, typically reflecting what they’ve identified as “material” priority topics. For the most actionable insights, it’s best to benchmark against specific metrics and not just total or aggregate performance scores.

Some key areas of focus, depending on your industry and materiality assessment, could be:

Environmental
- Carbon and other greenhouse gas emissions
- Air quality
- Water and wastewater management
Social
- Labor practices
- Employee health and safety
- Access and accessibility
Governance
- Business ethics
- Critical incident risk management

All of the above metrics can be investigated further in the AlphaSense platform by conducting a thematic search, coupled with the peer you want to benchmark against. Filter the search to company documents, and find the exact metrics you are looking for.

In addition to these metrics, it is crucial to monitor both the media and public’s perception of your company, as well as your competitors. You can find these insights in various news and media outlets, aggregated on the AlphaSense platform.

Why should companies pay attention to their ESG performance?

In today’s times, environmental, social, and corporate governance issues are particularly top of mind for investors, consumers, private equity groups, and businesses across all industries. There is no doubt that key ESG issues—carbon emissions, human capital, and business ethics—can have clear financial and reputational impacts on a company. In fact, countless studies have shown a positive relationship between ESG factors and a company’s longevity and market performance.

Therefore, it is prudent for a company to gain a full understanding of its ESG performance and incorporate ESG into the wider business strategy. Understanding current ESG standings will illuminate any areas of improvement and help address stakeholder questions or concerns, as well as ensure that a company is allocating the proper resources to address key ESG issues. Taking these steps is critical in unlocking new market opportunities, maintaining social license to operate, and mitigating legal and compliance risks.

Why should companies look at peers’/competitors’ ESG performance?

The ESG space is ever-shifting. The issues that capture public, media, and business attention change with the times and depend on a myriad of socioeconomic, political, environmental, and macroeconomic factors.

Monitoring your competitors and noting what ESG issues they are targeting at different points in time ensures your company mitigates glaring gaps in ESG strategy. It also helps identify areas where you are already winning, which can be beneficial to emphasize in communications with stakeholders and consumers.

How do companies use ESG benchmarking data?

Companies use ESG benchmarking data in a myriad of ways, depending on their industry, goals, and business needs. For the most part, companies use this data to better understand their own ESG performance and that of their peers. They use it to inform future strategy and to allocate resources to the areas deemed most important or where they are currently lacking.

Here are a few specific ways ESG benchmarking can fit into larger company goals:

Using ESG benchmarks to aid in talent acquisition and retention by demonstrating commitment to human capital and business ethics
Tracking management of sensitive ESG issues to demonstrate commitment to risk mitigation, reconciliation, and compliance to stakeholders
Using ESG performance insights to enhance ESG communication and disclosures to be more in line with peers and industry best practice
Using ESG performance insights to identify the most financially material ESG issues and create a roadmap for addressing those
Maintaining or enhancing reputation and securing consumers’ trust by communicating a commitment to fair labor practices, the energy transition, and addressing timely social issues

Does ESG still matter on an operational level?

ESG absolutely still matters—perhaps now more than ever before—particularly to investors and consumers. Climate change and social issues are top of mind for most nations, leaders, and individuals, which means companies must perform well on ESG to remain attractive as employers or brands. According to a PwC study of 325 investors, 79% said “ESG risks are an important factor in investment decision-making” and 49% said they are “willing to divest from companies that aren’t taking sufficient action on ESG issues.”

Furthermore, a company’s ESG performance has a clear correlation to their financial success and operational longevity. There have been more than 2,000 academic studies on the topic, and ~70% of them find a positive relationship between ESG scores and financial returns.

Finally, having a strong ESG score lowers operational and business risk. Evidence has emerged that a better ESG score translates to ~10 percent lower cost of capital, as the risks that affect your business, in terms of its license to operate, are reduced if you have a strong ESG proposition.

Try AlphaSense For Free

AlphaSense helps you navigate an ever-changing ESG landscape with confidence and speed. Combining aggregated access to a wealth of critical ESG information with powerful AI search technology, AlphaSense allows you to easily monitor your competitors, macroeconomic and industry trends, and more—eliminating research blind spots and giving you the competitive edge. We further streamline research processes and save you valuable time, ensuring you can focus on what really matters to drive business forward.

Take your ESG benchmarking to the next level with AlphaSense.

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