Measuring impact: the next challenge for companies in sustainability

Over the past few years, ESG management has been the dominant framework for evaluating and managing the performance of companies in terms of sustainability. And in Spain we can say that, in general terms, good has been done in the context of sustainability in listed companies.

According to the Sustainable Development Report 2023, Spain is ranked number 16 in the SDG Index, a ranking that evaluates countries' progress towards meeting these objectives. In this regard, our country has experienced steady progress since 2017, as its valuation went from 76.8 to 80.4 in the last edition of the report.

However, faced with these global challenges and the growing demand of different interest groups, companies need to evolve to a more comprehensive management. This scenario is where impact management becomes important, an approach that goes beyond the mere minimization of risks and regulatory compliance and that places the emphasis on generating tangible benefits for society and the environment.

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How companies are managing the measurement of their impact

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That's why this year at Transcendent we asked ourselves: How are companies managing their impact? The findings indicate how incipient this process is still. According to our report “Evolution of the management of ESG aspects towards the impact on listed companies”, Only 14% of IBEX 35 companies and 2% of the rest of the continuous market have incorporated impact measurement modelsOr. These figures reveal the difficulty and challenge of being able to measure the impact they generate for companies.

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However, if there is one thing to highlight, it is the advances in environmental matters.

On average, 81% of companies have set such goals. And due to regulatory pressure, all IBEX 35 companies have set environmental objectives, while in the continuous market the figure is already 68%.

Within these environmental objectives, more than 60% of IBEX 35 companies and 15% of the rest of the listed companies have set long-term goals of zero net emissions.

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Social commitments are moving forward, but far behind environmental priority

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On the other hand, if we stop to analyze the social commitments and sustainability of Spanish listed companies, they are still far from being as important as environmental ones, but their progress has been surprising since 2020.

Although just over half of listed companies (56%) have committed themselves to aspects related to their internal or external interest groups, the increase in companies with this type of objective has been more than 360% in the last three years.

But more striking is the fact that companies in the rest of the continuous market have accelerated their pace in setting these commitments, increasing their goals in social actions by more than 1,800%. Despite this large number, there is no doubt that IBEX companies continue to set the trend, with 80% of companies setting and communicating social commitments compared to 38% of the continuous market.

Diversity and supply chain management are the areas with the greatest commitment in the social sphere, especially in the IBEX 35. Among these, it is worth highlighting the efforts being made by listed companies to comply with the Spanish regulation of achieving a 40% presence of women on boards of directors.

Despite progress, there is room for improvement. Offering more tangible objectives to positively impact the community and the different interest groups can represent an opportunity to differentiate, to attract talent and to anticipate the next European Social Taxonomy, which will bring greater homogenization and, consequently, a necessary greater differentiation.