Achieving long-term results
The process of developing and publishing benchmarks helps to clarify the societal expectations that stakeholders have and to what extent companies meet these expectations. This Theory of Change, a method used to define the building blocks required to achieve a given long-term outcome, describes how our benchmarks aim to achieve long-term results.
Benchmarks provide clarity by assessing and comparing company performance against societal expectations, reflected in the methodology of each benchmark. Clarifying and reaching consensus on these expectations through extensive multi-stakeholder dialogue is essential to the credibility of and value created by our benchmarks. The broader this consensus, the more internal and external stakeholders will use the insights generated.
Benchmarks enable stakeholders to quickly and easily compare the relative performance of companies within a sector, over time, on a range of indicators. The benchmarks:
Show how companies perform against societal expectations
Benchmark methodologies establish practical indicators against which companies are assessed and compared. By creating straightforward metrics and points of comparison, benchmarks show where and how individual companies contribute to specific SDGs.
Stimulate the disclosure of non-financial information
Decisions taken by company stakeholders (e.g. investors, banks, customers, peers, governments) are based on the information available to them. Lack of reliable and comparable data is one of the main obstacles to the integration of sustainability targets in decision-making processes. Benchmarks harness the Environmental, Social and Governance (ESG) data that companies increasingly disclose but also stimulate additional disclosure.
Recognize the contribution of the industry and individual companies to sustainable development
Companies can be encouraged to adapt their policies and practices through positive or negative enticements. Benchmarks trigger a socialization process that recognizes good practice but also shows where industries or individual companies are lagging behind and where improvements are required.
Identifiy and disseminate good practices
Good practice is an excellent way to illustrate how companies can contribute and where others can improve. In addition, identifying and highlighting innovative business practices can stimulate their scale-up and widespread adoption.
The insights that are created by the benchmarks can be used by internal and external stakeholders as they seek to influence the strategies and business models of companies. Our benchmarks:
Enable evidence-based engagement by external stakeholders
Stakeholders have distinct relationships with companies. This puts them in a unique position to push companies to enhance their contribution to sustainable development. However, stakeholders often lack the tailored information needed to do this. Benchmarks show detailed information on the strengths and weaknesses of individual companies, providing an important basis for meaningful stakeholder engagement.
Empower and motivate internal stakeholders
Within companies, different forces and opinions compete for attention and resources. Benchmarks can be a powerful tool to drive internal change and engage different parts of the business on sustainability issues, including senior management. It can also help a company to identify strengths and areas for improvement as well as gauge its position relative to its peers.
Inform the wider public about company performance
Methodologies and benchmarks itself are publicly available, allowing wide access to and dissemination of outcomes. In addition, (social) media coverage and advocacy campaigns by NGOs have a significant influence on public opinion and corporate reputations. Public pressure and reputational considerations can be important drivers of corporate change.
Promote business accountability on sustainable development
Achieving the SDGs requires active private-sector participation. Benchmarks contribute to transparency and accountability by collecting information on sustainable development targets at the corporate level. Without company-focused data, it is impossible to track the contribution of the private sector or commitments made by individual companies.
Our benchmarks will have a longer term effect if they address the most material issues. They seek to become established measures for sustainability performance and responsible business conduct, providing important points of orientation in corporate strategy and business model development.
Depending on their core business and position in the value chain, companies are in a unique position to contribute to particular SDGs. Our benchmarks create a competitive pressure and a powerful incentive to companies to improve their contribution to sustainable development.
Industries that have a substantial impact on sustainable development are increasingly subject to public scrutiny and debate. Yet, key stakeholders often do not have shared and articulated views on what companies should do to achieve specific SDGs. The methodology of each benchmark is a collaborative effort, with input on the methodologies provided by stakeholders such as companies, civil society, (multilateral) government organizations, investors and independent rating providers. Thereby, our benchmarks help stakeholders to articulate their expectations.