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Invest in a greener future with ESG Intelligence

Is the goal of a company simply to prioritize profit at any price? A few decades ago, many people in the business would have answered with a resounding “yes”.

But in recent years, as the climate crisis and social inequality have come to the forefront of the global debate, more and more corporations have ramped up their efforts to align with the values of the societies in which they operate

In a Harvard-published report, Nobel laureate Oliver Hart and finance professor Luigi Zingales argue: “shareholders care about more than just money. Many shareholders pay more for fair-trade coffee, or buy electric cars rather than cheaper gas guzzlers, because, using the current economic lingo, they are prosocial. They care, to at least some degree, about the health of society at large. Why would they not want the companies they invest in to behave similarly?”

This is where ESG (Environmental, Social, and Governance) — a battery of value-based metrics taking into account “soft” factors such as sustainability and social impact — come into the picture.

“ESG is a new type of data that helps us understand how companies are managing themselves, particularly their resources. Whether that’s environmental (like energy or water); social; their employees; customers; societies they work within; or how they’re governing their companies. Generally, it’s due to an evolution in cultural values that companies are now obliged to do more than just return financial profits. There’s an increasing expectation for corporates to contribute to the communities they work within, to society at large, and to be responsible stewards of nature.”

For companies looking to improve ESG capabilities, having access to the right data at the right time is paramount. Not just any data will do: it must be up to date, reliable and clearly structured to be useful, and this is what underpins Dun & Bradstreet’s AI-driven ESG Intelligence solution.

While most ESG solutions offer data on at most 100,000 companies at most, Dun & Bradstreet is able to tap a vast global data cloud of business information to gather ESG information at over 25 million companies and growing. ESG performance is gleaned from firmographic information from both public and private sources, which provides company-specific information that doesn’t solely rely on self-reporting, news or proxying. In addition, the data is updated weekly and provided via API and other distribution channels on a monthly cadence, rather than yearly which can be the norm for ESG data dependent on the publications of annual reports.

"Thanks to these features, Dun & Bradstreet’s ESG Intelligence turns selecting ethical and resilient third parties — something that was previously very challenging, due to lack of data — into a quick and painless process. Companies are ranked according to 13 ESG themes and 31 topic categories, based on verified data from trusted sources."

Rochelle J. March Head of ESG Product Dun & Bradstreet

ESG Intelligence is the largest repository of ESG metrics that cover ethical behavior, such as human rights abuses, lawsuits or regulatory non-compliance, such as environmental fines, as well as metrics on how well companies have historically performed during disruptive events, such as economic downturns or natural disasters. Having these metrics available across millions of companies makes it easier for business leaders to track these issues across their supply chain or investing portfolios.

This means that procurement teams can breathe a sigh of relief, as now they can identify risky business partners at scale, and build deeper engagement with priority suppliers.

Compliance teams will also be relieved to be able to track the rapidly emerging array of ESG-related compliance issues, including data privacy, greenhouse gas emissions and climate risk disclosure, equitable compensation, or procurement directives. And with compliance teams morphing into ‘compliance and ethics’ teams, this increases their purview beyond adherence to existing regulation, but also to promotion of a culture of integrity and progressive action.

We will see an increased focus on ESG in the coming decade, as the climate crisis leads to tightened regulations. Organizations who act now stand a good chance of doing so without compromising their bottom line.

Tesla has made profits not from the sale of its cars, but through the sale of emission credits to other companies, who couldn’t keep up with Tesla’s emission goals. It’s a very interesting shift in business models, and an example of how you can marry profit and planet.

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