15 Reasons why ESG is a Nightmare and you should leave it to the Professionals.

For those well buried in our ESG journeys, the following is well known, and for newcomers, this is the baseline of issues being resolved:

1. Data quality and coverage remain an issue, making it challenging to assess a company’s ESG performance [1].
2. There are vast inconsistencies across different ESG rating agencies and frameworks, making it difficult for companies to benchmark and assess their ESG performance [3].
3. ESG data is often qualitative, and there is no universally accepted definition of ESG, making it challenging to develop a consistent ESG rating methodology [3].
4. ESG data can be difficult to quantify, making it hard to measure the impact of ESG initiatives [2].
5. Data collection and analysis require significant investments of time and resources [1].
6. The lack of standardised metrics and reporting requirements can make it challenging for companies to identify relevant data sources and report on ESG performance consistently [1].
7. There is a need for increased transparency in ESG reporting, as companies may be tempted to greenwash or selectively report on their ESG performance [1].
8. ESG data can be difficult to integrate with other financial and non-financial data, making it challenging to develop a holistic view of a company’s performance [1].
9. ESG data collection can be time-consuming, and companies may face challenges in collecting and analysing data from their suppliers and other third-party sources [1].
10. ESG data may not be relevant or material to all companies, making it difficult for smaller companies or those in certain industries to report on their ESG performance [1].
11. ESG data can be sensitive, and companies may face challenges in balancing the need for transparency with the need to protect their competitive advantage [1].
12. There can be a lack of standardisation in the ESG data provided by third-party data providers, making it challenging for companies to compare ESG performance across peers and industries [1].
13. ESG data can be complex and may require specialised knowledge and expertise to collect, analyse

Tread carefully.