Alternative ESG data refers to information on a company's environmental, social, and governance (ESG) performance that is not typically included in traditional financial reports. This type of data provides investors with a more comprehensive view of a company's ESG practices and can be used to make more informed investment decisions.
One source of alternative ESG data is social media and news. Social media platforms and news outlets can provide real-time information on a company's ESG performance and controversies. For example, if a company is involved in an environmental scandal, this information may be reported on social media and in the news before it is disclosed in the company's financial reports. By monitoring social media and news, investors can stay up-to-date on a company's ESG performance and make more informed investment decisions.
Another source of alternative ESG data is non-financial reporting, such as sustainability reports and corporate social responsibility (CSR) reports. These reports provide detailed information on a company's ESG performance, including its environmental impact, social impact, and governance practices. Non-financial reporting can also include disclosures on issues such as climate change, human rights, and diversity and inclusion.
Third-party ratings and rankings are another source of alternative ESG data. These ratings and rankings are based on a variety of ESG metrics, such as a company's carbon emissions, labor practices, and board diversity. By comparing a company's performance to industry peers, investors can gain insight into how the company's ESG practices compare to others in its industry.
Alternative ESG data can also come from public disclosures, such as regulatory filings and news articles. For example, a company may be required to disclose certain ESG information in its financial filings, such as its greenhouse gas emissions or its policies on human rights. News articles and other public sources can provide additional information on a company's ESG practices and controversies.
In conclusion, alternative ESG data provides investors with a more comprehensive view of a company's ESG performance. By considering this data alongside traditional financial information, investors can make more informed investment decisions and support companies with strong ESG practices. By monitoring social media and news, investors can stay up-to-date on a company's ESG performance and make timely investment decisions.
About Wequity
We specialize in providing ESG solutions, aimed at helping clients unlock the power of ESG data through AI-driven screening and reporting solutions.
As the world grapples with the existential problems posed by climate change, Wequity is dedicated to helping the financial industry implement sustainability at the core of its practices. The lack of data availability and the ensuing greenwashing practices that have emerged have complicated this transition, which is where Wequity comes in. By providing unique opportunities to support responsible investing and take ownership of sustainability efforts, Wequity is helping to create a more sustainable future.
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