Global ESG Monitor reveals weaknesses
140 companies and 185 ESG reports from DAX, EUROSTOXX, ASX50 and Dow Jones have been examined by the Global ESG Monitor. It is the result of an international collaboration led by Cometis and the research institute KOHORTEN together with Public Relations Global Network partners currie (Australia) and Xenophon Strategies (USA). The sustainability reports of the world’s largest companies were a disappointment: out of 66 points, companies scored an average of only 26.
ESG is a global trend – but for what reason is that actually so? ESG issues put a focus on globally pressing problems: for example, human rights abuses, social inequality, environmental pollution and climate change. We are still struggling with these problems all over the world, and solutions are not available yet, or not available to a sufficient degree.
Large companies, such as those listed in the examined stock market indices, are confronted with these problems and can have a strong influence on them. They can actively combat them as well as find and offer solutions. This is precisely the purpose of ESG reports: companies should monitor and compare sustainability measures with each other, creating competition for sustainable business practices.
ESG reports reveal extensive weaknesses
But what happens if the ESG reports of most companies are prepared unprofessionally? In any case, competition is not sparked. This is exactly what the Global ESG Monitor reveals. It identifies weaknesses in a wide range of topics. For example, while most companies outline relevant topics such as stakeholder dialogue, ESG risks and targets, or sustainability strategy, very few provide concrete facts and therefore remain on the surface. To give a few examples: only 19 percent state how they determined their own stakeholders. Furthermore, 35 percent admit which formerly set sustainability goals they have not achieved, while only 39 percent provide information on which ESG risks affect the company.
In the EU, the quality of reports is higher
The aim of the Monitor is not just to point out the weak points. It is intended to show companies concrete examples of where they still have potential for improvement – so that competition can emerge after all. The GEM also shows that not all regions have the same deficits. This allows companies to work specifically on their own problem areas. European companies in particular perform better than their American and Australian competitors. This is probably because there are already some regulations in place for ESG reporting in the EU. And there is more to come. This is urgently needed to keep this planet livable for both current and future generations. Sooner or later, there is no other way than to actively address sustainability issues.