ESG firms urged to boost efforts for lower carbon footprint

In a recent report, only four consulting firms were awarded the highest five-star rating for their sustainability and ESG practices.

As demand for ESG ratings continues to grow, environmental companies are advised to step up their efforts to lessen carbon footprints after only four companies clinched five-star ratings in the recent report from Environment Analyst.

Alice Pickthall, Head of Research at Environment Analyst, said that the four firms identified have a gold-level standard and are advanced in their journey on sustainability– something that most of the companies not included in the list have been lacking.

“These firms are the ones that provide the expertise towards driving sustainability. So it's crucial that they walk the walk and demonstrate their leadership by doing it first. Many of these firms obviously have investor backing and so the overall push from investors has been towards enhanced ESG disclosures across the board, and that has impacted many of the especially larger sustainability consultants,” she explained.

According to Pickthall, lack of transparency and consistency on carbon accounting are among the core issues that hinders the industry's progress on net zero and ESG reporting.

“Among the cohort that we looked at, there were a number of firms that were also incredibly advanced in their journeys, and there were quite a few that sat somewhere much earlier along the progress compared to each other,” she said.

Discussing the methodologies adopted by firms that have successfully reduced their carbon footprint post-pandemic, Pickthall emphasized the importance of measuring all emissions, particularly indirect or scope three emissions.

“Only by measuring these emissions fully, can consultancies put in place meaningful implementation plans to reduce them. The next step beyond measurement is verification. All of our leading firms, in particular those four firms, had one thing in common, they set accelerated Net Zero, near science-based targets,” Pickthall said.

She added that many companies experienced a surge in carbon emissions post-pandemic, largely due to the resumption of business travel. But some firms successfully managed this by introducing stricter policies, especially regarding flights.