One outcome of pilot cases in previous phases, conducted by the Roundtable (RT) members was the high effort of data gathering. In the earlier phases, the focus had been on collecting primary data via surveys. As a result, in the updated methodology, which was published in the Handbook 2018, the Hotspot Assessment was added. It makes use of existing secondary data and databases. The Roundtable members were therefore searching for efficient ways to collect the necessary data for this new Hotspot Assessment step in the Methodology. In the Handbook, RepRisk is described as one of the sources for collecting data from publicly-available media and stakeholder sources external to a company, thereby covering all relevant lifecycle actors in the supply- and end of life part of the value chain.
The small pilot performed by several members was intended to test the applicability of RepRisk as one of the data sources in the Hotspot Identification step of the PSIA methodology**. RepRisk has been used as a data source for several years already by one of the member companies – BASF – for their SEE-Balance® methodology. For the pilot, RepRisk provided several Roundtable members a four-day trial account to test its ESG Risk Platform for convenient data gathering about the various cases that were being assessed during Phase 6 of the RT.
RepRisk is a data science company specialized in ESG and business conduct risk research related to companies and infrastructure projects. Its methodology focuses exclusively on ESG risks (28 ESG Issues and 57 ESG Topic Tags, linked to international standards on ESG such as the UN Global Compact, OECD Guidelines for MNEs and more), using artificial intelligence and human analysis in 20 languages to scan 90,000+ sources on a daily basis. More than 500,000 ESG risk incidents are detected every day. In addition to specific company information, RepRisk also provides country-sector information for all countries and territories, and a total of 34 sectors such as Chemicals; Food & Beverage; and Mining. RepRisks methodology is fully rules-based and focuses on sources external to a company, which helps provide a unique perspective on a company’s risk exposure. Its primary purpose is to provide transparency and serve as a due diligence tool to help its users identify ESG risks and violations of international standards in their business and investments.
Insights and results using the RepRisk Platform varied between the team members who participated in the pilot. The following observations were made:
Overall RepRisk is a valuable tool to assist in the Hotspot assessment for companies in the value chain that are known by name and where there is no primary data (e.g., via EcoVadis) available. There is a good coverage / alignment on the social topics of the Handbook with the social topics in the ESG Risk Platform. The ESG Risk Platform is valuable in establishing a more efficient and systematic way of data collection in order to support decision-making.
The members of the RT acknowledge RepRisk for the opportunity to receive a pilot license for a limited number of days that gave them the opportunity to try out the database for the purpose of product social impact assessment.
* RepRisk is a global leader and pioneer in data science, specializing in premium ESG and business conduct risk research and quantitative solutions. Learn more at www.reprisk.com
** PSIA methodology: assessment method for product social metrics developed by the Roundtable for Product Social Metrics; the methodology is described in the Handbook 2018.