A major European energy company wanted to improve its performance scores in high profile ESG (environmental, social and governance) indices and ratings. Its goal was to become one of the highest-rated companies in its sector for ESG performance. To achieve this, its investor relations team needed a better understanding of the criteria that ESG ratings agencies assess and how they measure performance.
ESG investor relations specialists at KPMG in Spain analyzed the methodologies of ten major ESG ratings agencies. They also conducted in-depth interviews with several agencies to determine which ESG topics they considered critical and why, which emerging topics were gaining significance, and how the various rating methodologies differed.
KPMG’s analysis helped the client understand which areas of its ESG activity it should prioritize to achieve better ratings. Recommendations included improvements in Board oversight of ESG and new corporate governance approaches. With KPMG’s support, the company developed and implemented a strategy to improve its ratings and was also better prepared to respond to ESG enquiries from investors and ratings agencies.
Tomas Otterström, KPMG in Finland and KPMG in Sweden.