Don’t forget about implementation

4 augustus 2011

At this moment, many companies in the Netherlands spend time to fill in the online ‘Transparency Benchmark’ questionnaire of the Ministry of Economical Affairs. This benchmark measures how transparent companies are about their environmental, social and governance (ESG) activities. The deadline is approaching and 50 questions have to be answered. For many companies, this benchmark is only one of the very many questionnaires companies have to fill in on ESG matters. Rating agencies (e.g. the Dow Jones Sustainability Index) and shareholder/stakeholder initiatives (e.g. Carbon Disclosure Project) all have their own questionnaires. Furthermore, companies themselves are also guilty because it has become common practice to ask for ESG compliance from suppliers with questionnaires.

Companies almost need a full time employee as part of their sustainability or communications department to comply with all ESG questions asked by the outside world. This means that scarce human capital is being used to transfer information which is most times easily available on company websites. This distracts companies from doing what they need to do: implementing all the ESG activities that they are communicating. I should be right when I say that thorough implementation is also for the benefit of all the parties who send questionnaires to companies. Too much focus on full transparency can lead to hollow commitments and policies.
Companies once started to write sustainability reports to give information to the outside world on their ESG progress. Now they are writing sustainability reports and rewriting them multiple times for various parties just to comply with their questionnaires. Let’s end all the unnecessary work. Raters: the information that you want to analyse is available on company websites. A review from the company on your analysis will do. Companies: stop sending long and detailed questionnaires. The discussion on ESG matters should be part of the ongoing conversations with your suppliers and part of the contracts you have. Not something that is so marginal that a questionnaire will do. End the craziness people and focus on what’s most material: putting ESG into practice!
 

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