Benchmark season is coming!

While most of us are still busy finishing up our annual reports, invitations are already starting to roll in for benchmarks like the Carbon Disclosure Project (CDP) and the Dow Jones Sustainability Index (DJSI). With a well-deserved break within reach after the long days and short weekends that accompany the reporting months, suddenly the benchmarking season starts and you need to start running again.

But it doesn’t have to be like this. To help you, here are our 5 tips for a more relaxed benchmark season.

Tip 1: Start now

We regularly see companies starting too late with their benchmarks. This puts a lot of pressure on the organisation. At the very last moment the hunt for crucial information begins and you are depending on colleagues that don’t have benchmarking at the top on their priority list. Favours are asked and given, frustration builds, and the information obtained is often of a low quality. Just before the deadline, the sustainability officer is processing all the input, editing the questionnaires, and trying to add as much information as possible. Once again facing long days and short weekends.

So why not do it differently? Think of announcing the opening of benchmarking season early in the year. Organize a working session with key people in the organization during which you celebrate last year’s success and look ahead. Emphasise the value of involved colleagues’ contributions and provide insight into their role. Set up a detailed planning schedule and communicate continuously on deadlines and input. Doing so makes sure everyone can prepare themselves for their involvement in the project.

Tip 2: Involve higher management and the board

To obtain a high score, you need to depend on the specialists in risk management, carbon management and health & safety matters, to name just a few. Although the entire company benefits from a higher rating or score, most colleagues probably won’t be too eager to participate. They will need a little nudge in the right direction and it surely helps if a senior decision maker creates a sense of urgency. Additionally, in many cases the board is keen on a high positioning in the ratings and benchmarks, but doesn’t get involved enough. Make sure to focus on senior management involvement and creating that sense of urgency. It gives an almost direct improvement on the scores and makes the lives of sustainability officers a little easier.

Tip 3: Integrate and combine

We know that larger corporations have to deal with many different ratings and benchmarks. Just think of CDP, DJSI, FTSE4GOOD, Oekom, Vigeo, Sustainalytics. You may feel as if you keep asking your colleagues for the same information over and over, for different purposes. And that’s exactly the case!

Luckily, the overlap between the different rating schemes is increasing.  For instance, your CDP questionnaire can be uploaded to DJSI and different benchmarks are tying their questions to the GRI G4 indicators.

It may be  a useful exercise to make a complete overview of all the information you’re going to need and how it relates to G4. You can then arrange that the requested data and content for the annual report can also be used for benchmark purposes. You’ll only need to ask for information once instead of multiple times, you’ll be more efficient, and you’ll also keep your colleagues happy!

Tip 4: Establish a data trail

Most of the time the information you need to provide to the rating schemes is about 80% to 90% the same as the year before. Policies, procedures, key risks and important programs probably don’t change on a yearly basis. It’s therefore worthwhile establishing a data trail of the information you have provided to the different rating schemes. Simply secure basic details such as which department provided what information and how data was gathered and consolidated. This allows you to quickly gather base information for the benchmark or rating you are complying with and to build from there.

Tip 5: Don’t be the judge!

Too many times we see companies not sending in useful information to rating agencies because they doubt if it is good enough. Yet for most of the rating schemes it is not very clear how the criteria are to be interpreted,  so making such a call is dangerous. It’s better to work within a broader interpretation of certain requirements, send in information you think is relevant and let the rating agency judge. This allows for more specific feedback from the rating agency on the information provided and you’ll know where to improve and how.

Conclusion

While the administrative burden of complying with benchmarks and ratings is still considerable, we believe that with some changes the life of your sustainability officer can be made easier. Getting the right people involved, working according to predefined procedures, and the ability to provide valuable information are important prerequisites. After all, it would be a missed opportunity if your company’s sustainability performance was not reflected and recognized fully in the important benchmarks and ratings.

Nick de Ruiter is a partner at Sustainalize. He is a specialist in CSR strategy setting, benchmarking and performance monitoring.

Wouter van ‘t Hoff is a consultant at Sustainalize. He specializes in a variety of areas including sustainability benchmarks and ratings such as CDP, DJSI, and the Dutch Transparency Benchmark.