We’ve all seen it – one article or report that touts progress, value or benefits on a particular sustainability issue, followed by equally compelling information directly contradicting that. I wrote about conflicting survey results back in 2022 and not much has changed. Regardless of the ESG topic, it is easy to find credible yet conflicting information about it. This presents a real problem for CSOs, staff and ESG advisors: how do you determine what is “correct,” best to use/rely on and – how do you prepare to defend that when others bring forward information, data and reports that contradict your position?
I posed this question to our Advisory Board, who represent a range of perspectives and experiences in ESG. Doug Chia, President of Soundboard Governance LLC, offered these considerations related to the sources of information:
“In my former role, I discussed ESG with the executive committee and board on a high-level basis and did not get into the details of ESG reporting. When there were conflicting reports, data, predictions, etc. on a certain subject, I noted that and provided some idea where the prevailing sentiment was directionally. To make those determinations, I relied more on information coming from non-partisan organizations and those with fewer direct commercial interests (e.g., The Conference Board, The Aspen Institute). For example, I’d give more weight to a report from one of the Big Four accounting firms than a report from a service provider that was more likely using its ESG reports as marketing materials to make potential clients aware of their ESG services. While the Big Four obviously have huge commercial interests, their materials are generally created for their many existing clients and published for free for industry audiences that appreciate thought leadership from organizations that have access to massive amounts of data and experienced research teams. This required judgment calls, which I made based on my experiences with the people who produced the reports and knowledge of the integrity of their research.
You have to be careful not to rely on data just because they came from the biggest firms or most well-known brand names. Some of the firms in those categories have drawn controversy. MSCI’s research and ratings have been widely criticized, S&P had people scratching their heads when it removed Tesla from the S&P 500 ESG Index, and some have questioned ISS’ objectivity. On the other hand, controversy alone should not make you discount the value of data coming from a particular source. The anti-ESG movement has tried to manufacture controversy and with some success. It’s important to seek objectivity through the commercial and political noise.”
Doug’s point about non-partisan organizations is quite timely given the rise of the anti-ESG movement and the weaponization of ESG in general. The more objective your sources are, the stronger your position/argument is. And that is the ultimate goal here. In the coming days, I’ll highlight commentary and suggestions from other Advisory Board members as well.
If you aren’t already subscribed to our complimentary ESG blog, sign up here: https://practicalesg.com/subscribe/ for daily updates delivered right to you.
