Westwicke's recent post: "An Intro to Corporate ESG Research Providers & How to Respond to Their Requests" identifies a number of sound considerations relevant to determining whether to devote the time and other corporate resources necessary to respond to ESG research provider/rater questionnaires, and potential alternatives to participation (or full participation) that may achieve comparable benefits.
Suggested considerations as to whether to respond include:
- Ascertain the relevance of the requesting organization.
- How many institutional investors actively subscribe to the ESG provider's research and/or ratings?
- Is the ESG research provider's data integrated into software that is commonly used by institutional investors, such as Bloomberg or FactSet?
- Are the provider's ratings utilized by proxy advisory firms, such as ISS or Glass Lewis?
- Get a sense of what's involved in responding.
- Understand what information will be assessed by the questionnaire and the internal resources that will be needed to provide a comprehensive response.
- Estimate the time it will take to complete a questionnaire before deciding whether to participate.
In lieu of completing a questionnaire(s), the firm suggests companies consider leveraging their relevant public disclosure (which may include a website-posted CSR/sustainability report or other publicly-available information) by ensuring easy access to ESG researchers/raters.