ESG Data Overview

ESG data encompasses a broad range of environmental, social, and corporate governance considerations. Companies voluntarily release ESG reports to highlight their performance on various issues, or adherence to specific sustainability reporting guidelines and benchmarks, such as the GRI (Global Reporting Index) Standards or the UNGC (United Nations Global Compact).

ESG reports increase accountability and transparency for companies, which helps with attracting and retaining customers and investors, as well as helps companies mitigate risk, identify new opportunities, and take actionable steps toward a more sustainable and equitable future. 

What’s in ESG Data?

ESG reports and presentations are voluntary, so data within may vary from company to company. 

Topics included in ESG reports include:

Environmental – Includes information on environmental risk and opportunities, i.e. carbon emissions, natural resources, waste and toxicity, pollution, unsustainable practices, resource depletion, energy resources, supply chain, product sustainability, and actions that promote or combat climate change.

Social – Includes information on human rights and equity practices, i.e. labor policies, health and safety policies, community relations, product safety, data security, social cohesion and stability, employment levels, diversity, child or slave labor, and infrastructure.

Governance – Includes information on decision-making and board oversight practices, i.e. board structure, compensation or remuneration, stakeholder rights and takeover defenses, audit and risk oversight, tax practices, institutional strength, rule of law, chairman and CEO roles, bribery and corruption, accounting practices, and business ethics. 

Types of ESG Reports

Sustainability / Corporate Social Responsibility (CSR) Reports

This is known as a company’s annual sustainability report, or Integrated Annual Report, and is sometimes bundled with EHS, Social, and GRI reports.

These reports may contain:

  • Disclosures and initiatives related to performance and economic impact
  • Impact on the local community and environment
  • Awards and recognitions
  • Climate change strategy
  • Sustainable development goals
  • Sustainability partnerships
  • Sustainability scorecard
  • Climate reports
  • Green bonds

Environmental, Health, and Safety (EHS) Reports

These are topic-specific reports or web pages focused on workforce EHS, and they include:

  • Standards for and recaps of operating procedures
  • Workplace safety
  • Number of workplace incidents
  • Employee training
  • Materials safety
  • Emergency response

Social Reports

These are topic-specific reports or web pages focused on social contribution initiatives that could include:

  • Volunteer work
  • Donations
  • Community development projects

GRI Reports

These reports detail a company’s commitment to Global Reporting Initiatives (GRI) Standards, which is a sustainability frameworks many companies use to report their ESG disclosures. 

CDP Reports

These are reports put out by the Carbon Disclosure Project (CDP), which scores companies based on their environmental impacts and produces a framework for environmental disclosures. 

Putting ESG Data to Use

Making Better Investment Decisions

In today’s world, adding ESG stock to an investment portfolio is a surefire way to ensure returns on investment. ESG data is instrumental in screening companies for impact investing and developing a winning ESG investing strategy. 

AlphaSense helps financial services professionals evaluate ESG investing opportunities more effectively and efficiently through our vast content universe and advanced AI search technology. 

Check out our interactive tour to see how our platform does this in real time. 

Identify ESG Risk

ESG data allows investors and companies to assess risks related to environmental impacts, social issues, and governance practices that could affect financial performance and reputation. 

Continuous monitoring of ESG indicators can provide early warnings of potential issues, such as environmental violations, labor disputes, or governance scandals, enabling timely intervention. For companies, understanding ESG risks helps ensure compliance with current and upcoming regulations, thereby avoiding fines and legal challenges.

Applying ESG Data for Better Reporting

Companies can use ESG data to enhance transparency and demonstrate accountability to stakeholders by disclosing their ESG performance. Improved ESG reporting fosters better engagement with stakeholders, including investors, customers, and employees, by showcasing the company’s commitment to sustainability and responsible practices.

ESG data can be aligned with reporting frameworks like GRI, SASB, or TCFD, providing standardized and comparable information to investors and regulators.