Using Research to Drive ESG Value and Overcome Challenges

As ESG (Environmental, Social, and Governance) becomes a cornerstone of modern business strategy, its potential to create value is evident. However, the path forward is not without its challenges. ESG ratings are often inconsistent across agencies, making them a complex measure of performance, and where early strong momentum once characterised it’s proliferation that momentum stuttered recently.

Moreover, some experts question the correlation between ESG scores and genuine sustainable business practices, citing greenwashing and data quality issues as significant hurdles. For mid-market companies navigating regulated markets, this complexity underscores the need for actionable insights and a research-driven approach.

The ESG Landscape: Opportunities and Challenges

According to the Global Sustainable Investment Alliance, global sustainable investment reached $35.3 trillion in 2020, a 15% increase over two years. This momentum reflects a growing awareness among consumers and investors, who increasingly favour companies aligned with their values—whether it’s protecting the environment, empowering communities, or addressing societal inequities.

However, a disconnect persists between rising ESG activity and confidence in its outcomes. A 2019 United Nations/Accenture survey found that only 20% of CEOs felt businesses were making a meaningful difference in global sustainability efforts are, despite 48% committing to sustainability as part of their operations. This discrepancy highlights the critical need for robust ESG frameworks that not only align with stakeholder expectations but also deliver measurable impact.

Polar Insight, as a trusted growth consulting partner, helps businesses navigate these complexities by providing tailored ESG strategies grounded in rigorous research and actionable insights.

The Importance of Research in ESG Strategy

Polar Insight believes that research is the foundation for any successful ESG initiative. Effective ESG is not just about tracking metrics—it’s about understanding the intricate relationship between stakeholder priorities, market trends, and operational realities. Our proprietary research methodologies empower businesses to design ESG strategies that are both impactful and credible.

1. Addressing ESG Data Challenges

One of the biggest obstacles in ESG implementation is data quality. As Kenneth Pucker, former COO at Timberland, warns, “Garbage in, garbage out” remains a significant risk. Many ESG ratings rely on unaudited, self-reported data, which can lead to inaccuracies, mixed signals, and even greenwashing. Divergent ESG ratings—caused by differences in measurement, scope, and weighting—only exacerbate the problem.

At Polar Insight, we help clients cut through this noise. By gathering and analysing reliable primary data, we ensure that ESG efforts are informed by robust, verifiable insights. This includes stakeholder research that uncovers key expectations and risks, as well as market analysis that validates the long-term sustainability of proposed initiatives.

2. Designing Evidence-Based ESG Strategies

The complexity of ESG ratings often discourages companies from taking decisive action. Yet, research shows that ESG-linked initiatives—when designed effectively—can unlock significant value. For example, McKinsey has identified five key ways ESG creates value: driving top-line growth, reducing costs, minimising regulatory risks, increasing employee productivity, and optimising investments. Polar Insight works with clients to harness these levers, designing ESG frameworks that deliver tangible business outcomes.

3. Clear Communication and Transparency

Polar Insight also supports companies in crafting compelling ESG narratives. A strong ESG story not only builds trust with investors and regulators but also resonates with customers, who increasingly demand alignment with their values. For instance, ESG-driven consumer preference has propelled brands like Unilever to outperform competitors through innovative, sustainable product offerings.

Polar Insight’s Unique Approach: The Everest Framework

Polar Insight stands out in the crowded ESG consulting landscape through its structured and research-driven approach. Our Everest Framework guides clients from market understanding to execution, ensuring that every ESG initiative is actionable, measurable, and aligned with business goals. Our comprehensive services include:

• Stakeholder Research: Understanding both internal and external stakeholder needs to guide ESG strategies.

• Strategic Planning: Using data to validate ESG initiatives and align them with long-term objectives.

• Market Positioning: Helping companies communicate their ESG commitments effectively to differentiate themselves in competitive markets.

Overcoming ESG Challenges with Polar Insight

ESG’s growing prominence has exposed significant challenges, including discrepancies in ratings, noisy data, and the risk of greenwashing. Efforts like the MIT Sloan Aggregate Confusion Project aim to standardise ESG metrics, but meaningful change requires more than better data—it demands proactive strategies rooted in rigorous research.

Polar Insight helps companies move beyond the limitations of current ESG frameworks. By focusing on actionable insights, measurable outcomes, and transparent communication, we enable businesses to:

• Navigate Complexity: Address challenges such as ratings divergence and data quality issues with confidence.

• Deliver Impact: Design ESG initiatives that resonate with stakeholders and drive measurable business value.

• Build Trust: Craft transparent narratives that align with consumer and investor expectations.

ESG for the Long Term: Insights from Polar Insight

Polar Insight’s expertise uniquely positions us as a trusted partner for businesses seeking to navigate the evolving ESG landscape. Whether addressing the divergence in ESG ratings, improving data quality, or designing impactful strategies, our insights empower companies to turn ESG challenges into opportunities for growth and sustainability.

As ESG continues to redefine the future of business, organisations must act strategically to remain competitive. With Polar Insight as your guide, your business can leverage the full potential of ESG, creating long-term value for stakeholders and society alike.

Contact Polar Insight today to learn more about how our research-driven approach can help your business succeed in the complex world of ESG.