A look behind the curtain: our new Environmental, Social and Governance data
Lily Ruaah, 09 November 2023
We’re excited to announce the launch of our Environmental, Social and Governance (ESG) dataset, which will sit alongside our All Company data.
Our ESG dataset is designed to empower you with a holistic perspective on companies by not only capturing their financial and operational aspects, but also shedding light on their environmental sustainability practices, social responsibility initiatives, and governance principles. By combining this ESG data with our existing All Company data, we aim to offer an unparalleled overview of businesses in the UK.
We spoke with Chynna Brenham, Beauhurst’s Data Product Manager, who is spearheading this new launch, to deliver you this detailed Q&A.
About Chynna Brenham
Chynna joined Beauhurst in 2017, right after completing her university degree, taking on the role of Data Quality Analyst within the Data team. Within a couple of years into her career, she assumed leadership of the team, with a primary focus on maintaining data quality on the Beauhurst platform.
Later on, she transitioned to a leadership role within a new team called Datasets & Tools. In this capacity, her objectives included evaluating the current data offering, looking for new datasets and spearheading the development of backend technology and tools required for data collection from diverse sources. She currently oversees this team within the Product department, ensuring that the datasets and technology they produce add significant value to Beauhurst users.
The Q&A
What is ESG data?
“ESG is a set of standards for identifying the impact of a company on society, the planet and the world at large. ESG is made up of three pillars: environmental, social, and governance.
“Environmental refers to the practices—things like tracking carbon emissions, building clean energy sources, and going paperless—that impact the environment.
“Social relates more to how a company treats its employees, customers, and wider society. This is things like DEI initiatives, working conditions, and even customer satisfaction.
“Governance is more focused on the processes, the decision making and logistics of running a business. It’s looking at ethical behaviour, and transparency with shareholders. And that’s where it’s closely linked to the other pillars of ESG, as it’s around the transparency and accountability behind those aspects.
“At Beauhurst, we’re launching ESG signals indicating whether a company has a positive environmental or social impact.”
“That's because we believe there doesn't have to be a trade-off between economic growth and a positive impact on the world."
What is the methodology behind the data?
“Obviously, it will vary for all the different signals. With the environmental signals, there are four generated based on a company’s activities. Those are:
- Clean and renewable energy
- Green transport
- Sustainable agriculture
- Green infrastructure
“We can understand a lot about a company from their website, their description, the sectors and buzzwords they’re associated with. This is how we’re finding these signals currently.
“Now, there’s scope to expand this to include things such as patent data, and potentially looking at things like grant abstracts, because these are really good areas to find niche industries and technologies. And while we’re not doing this for the moment, it’s an area we can explore in the future.
“Whereas the social and governance signals are predominantly using people data—the gender pay equality signal is looking at gender pay gap data, which is published on the government website. Companies over a certain size must report data on the pay in their organisation between men and women.
Companies receive this gender equality of directors signal if the percentage of women directors is between 45% and 55%—excluding companies with less than two directors, and where the gender is unknown.
The target here is trying to find those companies that are driving pay equality. Whereas for the gender equality of directors signal, we’re looking at the gender of directors and ensuring that there’s not more than one man or woman in either direction.
We’re focusing on equality here, because it feels like an appropriate middle ground. There will be clients who are interested in tailoring these metrics to suit their own mandate or their own ESG credentials. The platform can do that.
“Now, the age diversity of director signals is quite an interesting one. And looking at the age of directors for companies with more than two directors, any company with less than two directors creates a small company bias.
So, we just wanted to exclude those for this analysis. And without getting too statistical or talking about formulas, we’re looking at the variation in the age. If there’s not enough variation, or there’s too much, then the company doesn’t receive the signal. So once again, we’re going for the median variation in age. This captures the fact that a board of directors could have multiple generations.
“The accolade signals: these are predominantly looking at whether companies have received funding, attended an accelerator or featured on lists that have an environmental or social focus. So again, utilising the existing data on these rich deals and company events.”
What kind of companies can benefit from the ESG data and why?
“I honestly believe that it’s something everyone should be interested in. It doesn’t matter what client type you are.
"Even if you don't have an ESG focus or mandate, society is becoming more conscious of partnering with companies that share their values."
“And if you don’t have an ESG focus currently, you can use our data to become more knowledgeable in this area. You can learn how ESG could play a part in your business and build out an ESG strategy from that.
“Cop28 is coming up in a few weeks. So, we’re very likely to see a buzz on environmentalism as a result of that. You might want to capitalise on this,produce your own content pieces, or gauge and get involved in conversations with your clients.”
What excites you most about ESG data?
Why is ESG data important, in your opinion?
"We're only going to see more regulation and more pressure from governments to address environmental concerns. For our clients it would be best to get ahead of that curve and start thinking about their ESG strategies now."
Why is this data set so unique?
“Our data is unique because we’re looking at every company in the UK to generate our ESG dataset. We needed to build something that could cover all UK businesses for more effective tracking of ESG within the UK economy. And that means you can layer this ESG data alongside all of our other datasets to provide you with the insights you’re interested in.
“Whether that’s monitoring green transport in your local region, analysing investment trends in age-diverse businesses, or finding clean energy companies that might need support applying for a patent. These will all be possible with our new ESG data set.”
If you were a BeauhurstAdvise customer, how could you use ESG data to give better client advice?
“It’s likely that many business advisory customers are already trying to tailor their approach from the angle of ESG. For many, ESG credentials are already a part of their due diligence process. But using this dataset, you’ll be able to find ESG-focused companies that gather market intelligence to understand the trends in this space, and in turn, give informed advice to your clients surrounding ESG.
“It might be that you are looking to target an acquisition for a client that has a strong culture of DEI (Diversity, Equity and Inclusion). Finding a company that shares these values is essential in our data to help you to do that.
Advise clients who aren’t already thinking about ESG—accessing this data could be the first step to laying out an ESG strategy and understanding the space. So you could also keep an eye on what your competitors are up to. Or you could monitor your existing clients’ ESG impact as well.”
As a BeauhurstImpact customer, what ESG data would you use to identify, track and support local and national businesses? And support greener businesses?
“Imagining I was a local council, or maybe a university, I would straightaway be running some analysis on which businesses in my local economy or area have ESG signals. These customers are likely feeling pressure to have a net zero pledge or goal. So, understanding which companies are actively working towards this goal and partnering with them are the first steps to building out a local green economy.
Once you’ve set up your collection with these companies, over time, you can look at their employee account turnover, or investment trends or other metrics you’re interested in.
You could also compare yourself to other regions or universities that could shape your targets and goals in this space. This is where having all company data plays a vital role in ensuring that you’re able to monitor your area of interest effectively, essentially making sure you’ve got that full picture.”
BeauhurstInvest: how can you use ESG signals to find up-and-coming businesses that others might miss out on?
“By using ESG signals, you’ll be able to discover those companies that previously have been quite difficult to find, as they have yet to receive funding or garner much publicity.
Let’s say you’re trying to find an early-stage clean energy storage company—you can set up a search using the clean energy signal. And alongside any, perhaps geographical restriction or company size restriction you have, you’ll immediately be presented with a list of high-quality leads and clients that haven’t yet raised any money.
Alongside this, you’ll be able to monitor the ESG impact of your portfolio and track that ongoing. Therefore, even those investors that aren’t necessarily impact funds or have any ESG focus could take advantage of the data to understand their portfolio of companies better.”
And ultimately, as a sales team and a business, how can ESG signals help you sell more?
“Firstly, it’s important for all sales teams, regardless of whether they have an ESG focus or not, to truly understand the companies they are reaching out to for a more personalised approach.
“The ESG data will help sales teams to better understand a company’s ethos and values, and potentially lead to a better conversation with those leads.
“For the sales teams with an ESG focus, it’s likely they’re looking for mission-driven companies that can achieve their goals with their products, in which case they can find a more targeted lead list using the ESG signals.
“There’s also an opportunity for sales teams, such as recruiters, who could be trying to hire for companies with a social ethos or place people who have aspirations to work in a company making a social impact. In this case, you can use the social and governance signals here to find people or companies with the same values and then you’re more likely to have success hiring in these positions.”
Our summary
Announcing the release of our new Environmental, Social and Governance (ESG) dataset, a comprehensive resource designed to provide an in-depth view of UK companies’ environmental, social, and governance practices. This dataset complements our existing All Company data, ensuring users get a well-rounded perspective of businesses.
If you’re a Beauhurst customer, and want to know more, speak to your Account Manager or Customer Experience Manager.
If you’re not a Beauhurst customer yet, fill in the demo form to learn more on ESG data, and how it can help you achieve your goals.
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