Client Snapshot
Peer benchmarking has become an important tool for companies seeking to understand how their ESG disclosures and initiatives compare with those of relevant industry peers. For companies operating across a single product or business line, identifying a comparable peer set is relatively straightforward. For diversified companies, however, this exercise is considerably more complex, since no single peer group can meaningfully represent the entire business.
This case study relates to a manufacturing company operating across multiple products and business segments. With ESG performance increasingly being benchmarked by investors and other stakeholders, the company sought to understand its ESG positioning relative to relevant peers, both in terms of the quality of its ESG disclosures and the depth of its ESG initiatives, across each of the segments in which it operated.
The Challenge
- The company operated across multiple products and business segments, each with a distinct set of relevant industry peers, which significantly increased the complexity of the benchmarking exercise.
- No single peer group was fully comparable to the company’s business, given that its segments differed from one another in terms of products, scale, and end markets
- Peer companies varied considerably in how they approached ESG disclosures, with some providing detailed and structured reporting and others disclosing only minimal information, making like-for-like comparison difficult
- Publicly available ESG information on peers was scattered across multiple sources, including annual reports, sustainability reports, company websites, and rating agency disclosures, requiring significant effort to identify, compile, and analyze.
- Benchmarking disclosures and initiatives across such varied peer sets, while still arriving at a meaningful and consolidated view of the company’s overall ESG position, required a structured and carefully designed methodology
Our Approach
- Identified relevant peer companies separately for each of the company’s business segments, based on the products, end markets, and scale relevant to that segment
- Developed a structured framework of ESG parameters covering environmental, social, and governance aspects, against which the company and its identified peers could be evaluated consistently.
- Collected and reviewed publicly available ESG disclosures of identified peers, including annual reports, sustainability reports, and other relevant sources, to build a comprehensive database of peer practices
- Conducted a comparative analysis of the company’s ESG disclosures and initiatives against each segment-wise peer set, evaluating not only the quality and depth of disclosures but also the substance of the ESG initiatives adopted by peers
- Consolidated segment-level findings into an integrated, company-wide view of ESG positioning while preserving segment-specific insights, given the differing peer sets and expectations relevant to each business.
- Presented the findings, along with actionable recommendations, to help the company strengthen both its ESG disclosures and initiatives, informed by leading practices observed across its peers.
Results Delivered
- Provided the company with a clear, segment-wise view of its ESG positioning relative to relevant peers, despite operating across multiple products and business segments.
- Enabled the company to identify specific areas where its ESG disclosures lagged behind peers, as well as areas of relative strength.
- Highlighted leading ESG initiatives adopted by peers across segments, providing the company with practical reference points for strengthening its own practices.
- Supported the development of a structured, evidence-based roadmap for improving ESG disclosures and initiatives across the company’s various business segments.
- Enhanced the company’s ability to benchmark itself on an ongoing basis through the segment-wise peer sets and evaluation framework developed as part of the engagement.
Impact
Peer benchmarking is inherently more complex for diversified companies operating across multiple segments, since no single peer group can be representative of the entire business. By identifying peers separately for each segment, applying a structured ESG evaluation framework, and comparing both disclosures and underlying initiatives, the company was able to understand its ESG positioning in a segment-aware manner.
Findings across segments were then consolidated to provide an integrated, company-wide view for leadership, while retaining the distinctions needed to reflect the different expectations applicable to each business. This gave the company clear insight into its gaps and strengths, along with practical reference points drawn from peer practices, to guide future improvements to its ESG disclosures and initiatives and strengthen its credibility with investors and other stakeholders.
