Value Portal are a company that have designed the ESG_VC Measurement Framework to help nascent companies assess how they are performing in the three key areas of ESG, namely environment, social and governance. The framework consists of 53 questions, the answers to which will enable companies to establish how well they are doing with ESG matters and how they can move forward with improving those scores. Once the scores are submitted, they are rated in terms of stars ranging from one star to four stars to determine a company’s performance in terms of ESG. This article will look at the questions covered by this framework in order to better understand how a company can improve its ESG profile.
Environmental Measurements
The first section is about measuring your carbon footprint as a company and does your company have a policy in place to achieve net zero? And if so, how is the company carbon footprint monitored.
The next group of questions is about air pollution. Does the company have a policy regarding using public transport to reduce car fumes? Is there a sustainable travel policy in place? Are there any plans to electrify the company fleet of vehicles?
The third section is about recycling and reusing packaging and waste. This is referred to as the ‘circular economy’ whereby materials can be reused or repurposed.
After recycling the questions focus on procurement. These questions are to nudge companies into using local companies so transport carbon emissions are reduced. It also asks if the company uses suppliers that have screened themselves for carbon efficiency.
Social Measurements
The first tranche of questions in this section focuses on parental leave for new parents. Does the company offer more leave than the statutory requirements in the law? And are there any work initiatives to help employees get back to work after having a baby?
The next area scrutinised under the social section is diversity. Companies wanting to complete the ESG_VC Measurement Framework need to run a survey of staff to see how they identify. Diversity focuses on making sure women, LGBTQ+ people and under represented ethnic minorities make up part of the work force. Just employing white, straight males produces a very low score in the social section.
Following on from this topic the framework asks what diversity training is given to staff, what facilities do they have for promoting diversity (such as wheelchair access), and what recruitment initiatives are there to employ more people from minority ethnicity backgrounds.
The next set of questions focus on staff wellbeing. Are the staff paid a living wage? Do they have health insurance through the company? Are there any policies regarding supporting staff with mental health issues? And what financial help is there for staff who are studying or upskilling as part of their job remit?
The final part of the social section looks at how a company helps their local community either in donations or staff time spent on community projects.
Governance
Governance is concerned with a company operating ethically and responsibly. Questions look at the composition of the board and if there are any independent members sitting on the board. How often does the board meet? And does the board often broach the topic of sustainability?
Following on from this topic, are questions dealing with the gender pay gap.
The next area of concern is data storage of customer details, GDPR regulations and cyber security. Good governance needs to have digital protocols in place regarding protecting privacy, securing data and giving direction over the use of AI and machine learning.
The final section in the governance part of the framework is about policies that are in place. This section captures much of the essence of the earlier questions. Are there company policies regarding such topics as ESG, diversity, remote working, anti-corruption, whistle-blowing, work place harassment and good business practice?
Summary
The ESG_VC Measurement Framework provides a comprehensive and systematic way of assessing and improving a company’s performance in terms of ESG factors. Some of the questions are easier to answer than others. For example, it is easier to count how many people in an office identity as LGBTQ+ than to determine the carbon footprint of a company. However, the road map is clear from this framework as to what companies need to do to get a better ESG score. Owners and shareholders might not like the costs involved in electrifying company vehicles, offering more paternity leave or giving a board seat to an independent member but these are the actions that are needed to slow down climate warming, fight social injustice and promote a sustainable vision for the future of not only business but also the planet.
