It seems like at least once per day, I read about a new survey relating to some aspect of corporate ESG. This includes things like:
- Corporate spending on ESG
- Investor use of ESG information/ratings/screening
- Types and scope of ESG initiatives
- Industry-specific trends
- Board roles, responsibilities and activities
- Corporate staff and management roles, responsibilities and activities
- Climate program reporting, scope and status
- DEI program status and outcomes
- Supply chain ESG requirements
I’m sure you have seen these too. They come from consultants, audit firms, accounting firms, IT companies, industry associations, financial services firms, ESG ratings organizations, proxy advisors, law firms and the media. They are everywhere. This could be considered a good thing in that a wealth of benchmarking data exists that didn’t only a few years ago.
But there is a dark side to this as well. And in my opinion, it is growing significantly.
The problem I am referring to is that of conflicting survey results – the situation when one seemingly credible survey reports results completely different from or in conflict with results of another equally credible survey of ostensibly the same respondent types. At the moment, the most common example I am seeing is planned corporate expenditures for ESG in the coming year. Given the economic uncertainty and the recent spike in layoffs, this is a timely question. Some surveys conclude that ESG programs are very likely to be some of the first spending cuts made by companies, while others report that ESG spending will grow at a record pace. I can’t recall a time when I have encountered more directly contradictory results from what seem to be similar respondents.
Reporting of climate risks is another topic where survey results are inconsistent to say the least. Yes, I know company-specific differences are at the root of all survey results and that survey results aren’t typically lock-step with each other. But the company ESG surveys are so wildly contradictory to each other right now, I question whether they are even worth reading or considering.
It is tempting to use these surveys when you want to benchmark your ESG program or direction, but be mindful of the potential problems. You may be better off conducting your own research on specific matters of interest from your own selected target reference points. It may not be easy but your results will be more defensible.
