12 key ESG indicators to track in your company

ESG (Environmental, Social and Governance) brings together the environmental, social and governance criteria that investors, customers and partners use to assess a company. Companies that track ESG indicators see where they can reduce impact, risk and cost, and they show it with data instead of speeches.

The PwC Global Investor Surveyopens in a new tab, published in November 2023, polled 345 investors and analysts in 30 countries. 94% of them say corporate sustainability reporting contains unsupported claims. A measured, tracked indicator is what backs up what a company says.

In this article, we cover what ESG indicators are, how to measure them and 12 indicators to start with, split across the environmental, social and governance pillars. At the end, we look at how to track them in Stratws.

What are ESG indicators?

ESG indicators are metrics that assess a company’s performance on environmental, social and governance aspects. They show how the company operates in relation to the environment, to people and to its own rules.

On the environmental side, indicators measure the company’s impact on the natural world, such as resource use, greenhouse gas emissions and waste management.

Social indicators cover the relationship with employees, suppliers, customers and communities. They include fair labor practices, worker health and safety, product safety, community engagement and the protection of human rights.

Governance indicators assess leadership, audits, internal controls and shareholder rights. Strong governance reduces risk and builds trust among investors and other stakeholders.

Tracking these indicators also makes it easier to access capital, opens room for new business and helps anticipate legal and regulatory risks. To connect ESG goals to strategy, see our post on sustainability goals.

How to measure ESG?

There is no single global standard for measuring ESG. Companies use different methodologies and reports, such as the GRI Standards, the WEF-IBC ESG indicators, the SASB standards and the ETHOS-SEBRAE indicators. Each one offers a model for collecting and disclosing data.

These references range from general norms to industry-specific standards, and each company chooses and adapts indicators to its sustainability objectives. To define each indicator and align it to strategy, see our post on how to create indicators and align KPIs to strategy.

12 ESG indicators to track

Tracking every ESG indicator is impossible for any company, because there are so many. The way forward is to map which ones make sense for your business and choose those.

Start with a few. Once tracking is stable, add others.

Below are 12 ESG indicators to guide that choice.

Environmental indicators

• Greenhouse gas (GHG) emissions: measuring direct and indirect emissions shows the company’s climate impact and where it can cut. Strategies include shifting to renewable energy, improving energy efficiency and managing logistics.
• Water consumption: tracking consumption reveals waste and opportunities for reuse, especially in high-use sectors such as agribusiness. Water recycling systems and improvements to industrial processes help reduce it.
• Waste management: measuring the amount and type of waste generated makes it possible to build reduction, reuse and recycling strategies, such as composting and recycling programs.
• Use of natural resources: assessing the use of raw materials and adopting sustainable, certified sourcing practices.

Social indicators

• Diversity and inclusion: measuring ethnic, gender and cultural diversity in the workforce. Diverse hiring programs and inclusion training are possible initiatives. Our post on leadership and management for diversity goes deeper into the topic.
• Worker health and safety: monitoring incidents and health and well-being policies. Better safety equipment and well-being programs are ways to improve.
• Community engagement: assessing the social and economic impact on local communities, with actions such as volunteer programs and community investment.

Governance indicators

To structure this front, see our post on corporate governance best practices.

• Board structure and diversity: analyze the board’s makeup to ensure a variety of perspectives.
• Anti-corruption practices: implement policies and training to prevent corruption.
• Shareholder rights: ensure fair and transparent practices.
• Transparency and financial reporting: ensure clarity and accuracy in financial communications.
• Risk management: build strategies to identify and manage business risks. See also our post on risk management indicators.

How to track ESG indicators in Stratws

The ESG indicators your company chooses enter Stratwsopens in a new tab like any other management indicator. In the Spreadsheet, each one receives the actual value and the target for each period, and the Farol shows the status in real time and compares it with previous years.

In the Scorecard, indicators are tied to the strategic objective they serve, with targets and projects. Each environmental, social or governance indicator belongs to a management unit and has a place in the company’s plan.

Permission control by management unit defines who enters values and who only views them. This protects the reliability of the data behind your ESG tracking.