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How Technology is Helping ESG Rating

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With the help of software developed by a number of tech companies like INTELEX, Greenstone, Accuvio and Navex, companies can now easily manage their compliance with different ESG frameworks. These play a crucial role particularly since there are more than 400 ESG metric.

Technology has also helped rating agencies in charge of rating and recording the ESG of different companies. Companies like S&P and Fitch have devised their own systems to record and score ESG performance. For example, S&P uses a data distribution system, Xpressfeed and provides both ESG Scores and ESG Evaluation to participating companies.

Thomson Reuters have joined the ESG rating club. The company designed their own ESG Score where a company’s performance across different themes including resource use, emissions and environmental product innovation, among others, is being graded.

ESG Rating thus plays an important role in helping shareholders and stakeholders understand how the company is performing. It becomes a method of holding a company responsible for not keeping up the promises it made to its shareholders and stakeholders. This is especially true and important in instances where a company claims to be green, treat their employees equally or provide a safe environment for work but doesn’t respect the promises it made. This is for example the case of BrewDog, the multinational brewery, where employees described the working environment in the company as a ‘rotten’ workplace (iNews Online).

As such, Rating Agencies with the help of technology can ensure companies are being held responsible for their promises, actions and performance across the different ESG matric.

 

Katie Grant, BrewDog CEO James Watt vows to ‘learn and act’ after damning open letter details ‘rotten’ workplace culture, (iNews Online). Found at: < https://inews.co.uk/news/brewdog-open-letter-ceo-james-watt-rotten-workplace-culture-allegations-1045781> Accessed on 30 August 2021.

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This article was published outside of GRN Think Tank. The full text of the article can be found at the link above.

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