Global ESG Monitor
English Version,  Raport de sustenabilitate

Global ESG Monitor 2024: Energy companies report broadly on sustainability, lack of depth is still a problem

The energy industry’s sustainability reporting  impresses primarily with carefully performed materiality analyses. Despite that fact,  their extensive reports lack depth and could profit from more contextualization of  the given information when it comes to the respective material topics. This is the  main result of the Global ESG Monitor 2024 (GEM), an independent think tank that  analyzed the quality of the sustainability reporting of 194 companies taken from  German stock indices DAX, MDAX, SDAX as well as from an international sample, including a sample of 10 leading energy companies. 

“Their business models allow the  energy companies to make significant contributions to the global climate goals and  also makes them the ideal role models to pioneer sustainable economic activity. To  match these expectations with regard to sustainability reporting, the companies from  our energy industry sample must present their commitment to sustainability even  more transparently in the context of the upcoming ESRS. An effort that will also be  paramount in meeting the rising expectations of their stakeholders.”
Michael Diegelmann, co-founder of the Global ESG Monitor and board member of  the IR and ESG consulting firm cometis

The exemplary best-in-class scores of up to 79 points and the alarming rear end of  only 15 points (out of 100 respectively) illustrate the vast differences of reporting  quality within the field. From these extremes, an average score of 46 points emerges  which is just one point more than the average of the total GEM sample of all 194  companies. 

On average, 8.4 out of 10 possible topics were identified as material in the energy  sample. This number is significantly higher than that of the total GEM sample which  lies at 5.7 topics. The increase in material topics also extends itself to the space  dedicated to sustainability: The median page number of sustainability reporting  within the energy companies’ annual reports was at 100 pages. 

The reporting gaps in balance, accuracy, topicality, comparability and  comprehensibility deducible from the average score are reflected in the calculated  degree of compliance with the European Sustainability Reporting Standards (ESRS),  which were already taken into account by the GEM 2024. On average, the energy  sector reaches 41 percent compliance with the requirements of the ESRS. There is  only one company significantly ahead of the field with 72 percent. 

Regarding the principles of good reporting, whose importance is also highlighted in  ESRS standards 1 & 2, the energy sector tends to perform well: Many companies  within the sample regularly score more than 80 out of 100 points when it comes to  criteria such as materiality, due diligence or stakeholder integration. 

Stakeholder integration for example is an exceptionally important topic for energy  companies as they frequently find themselves in conflicts of interest with  governments, investors, local communities or non-government organizations (NGOs).  Scoring 69 out of 100 points on average, the energy sector already delivers a  comprehensive and useful account here. 

“The careful materiality analyses and in  accordance with that the large variety of sustainability topics reported on is a solid  foundation for these companies to systematically improve their reporting, especially  with regard to future ESRS compliance. Nevertheless, they have to make significant  efforts to include more details and context in the reporting on their material topics. They also deserve to be commended for their uniform consideration of biodiversity  as a material topic which makes them a standout industry in our study.”  
Ariane Hofstetter, co-founder of the Global ESG Monitor

As part of the ESG webinar series (Impact Challenger Days), those who are interested in learning more about the trends and best practices in reporting for more important industries, can participate free of charge by registering here).

About the Global ESG Monitor  

The Global ESG Monitor (GEM) is an independent think tank dedicated to analyzing  and comparing the quality of sustainability reports. Since its foundation in 2020, the  GEM has analyzed over 1,300 reports from more than 500 companies worldwide. The  operationalization of quality (transparency & context) is based on the GEM ASSAYTM methodology, which integrates the principles and criteria of the European  Sustainability Reporting Standards (ESRS), the Global Reporting Initiative (GRI), IFRS  (IFRS S1 and S2), the Task Force on Climate-related Financial Disclosures (TCFD), the  United Nations Global Compact (UNGC) and the German Supply Chain Sustainability Act (LkSG).

In addition, findings from the dialogue with relevant stakeholder groups  are incorporated into the methodology. To ensure very high data quality, each  company report is analyzed three times. The results of the analyses are published  by the GEM Academy and the Impact Challenger Days. Interested companies can  access detailed, individual analyses to improve their own sustainability reporting. The  GEM thus offers companies a second opinion on their reporting and helps them to  continuously develop their sustainability communication through peer group  comparisons and benchmark analyses. Further information can be found at  www.globalESGmonitor.com. 

About the Integrity Star Award  

The Integrity Star Award (ISA) recognizes the best sustainability reports from the  DAX®, MDAX®, SDAX® and an international sample. The award makes best practices  publicly accessible and provides comparative data and benchmarking opportunities.  The aim is to provide companies with a data-based foundation for improving their  sustainability reporting so that they can fulfil the high expectations of stakeholders  and regulatory authorities. The assessment is not carried out by artificial intelligence  or a jury, but by an experienced team of analysts who analyze the reports using the  sound, objective methodology of the GEM ASSAYTM.

At the same time, the companies  are shown how their reports could be perceived by stakeholders. The Integrity Star Award is based on the evaluation of the current sustainability reports before the  expected changes by the ESRS and can serve as a basis for future progress  measurements. 

About the Impact Challenger Days  

The Impact Challenger Days (ICD) are dedicated to the topic of sustainability  reporting in all its facets. The focus is on ESRS and CSRD, materiality, environmental  issues and social and governance topics. In addition, the ICD will present sector specific findings and, thanks to the cooperation with IR24, webinars that take a closer  look at the topic of sustainability from a capital market perspective. Take part in the  ESG webinar series free of charge: here.

Leave a Reply

Your email address will not be published. Required fields are marked *