In 2024, we turned our attention to ESG (Environment, Social, Governance). The three pillars encompass a range of global issues that are measured in a quantitative and regulated way.

ESG aims to provide stakeholders — such as investors, consumers, and regulators — with transparent insights into a company’s sustainability practices. In practice though, it is not without controversy. ESG faces challenges such as inaccurate data collection, the risk of misleading claims, and pressure that may lead companies to overstate their sustainability efforts.

In response, new EU legislation will soon require nearly 50,000 companies to disclose their environmental and social impact in an effort to “end greenwashing, strengthen the EU’s social market economy, and lay the groundwork for new global sustainability reporting standards.”

— EU Parliament press release, November 10th 2022

Whilst this legislation marks a positive step toward increased accountability and transparency, we believe such critical data needs better data design practices to reach it’s full potential.

Why is CLEVER°FRANKE interested in ESG?

• ESG is driven by data
  Data is at the core of what we do. We transform complex datasets into informative, insightful and valuable sources of information.
• ESG aspires to have a positive impact on the world
  We care about our work and its impact on society at large. We’re advocates for the power of data, and recognize the powerful potential for ESG data in helping us make sense of the changing world around us.
• ESG is complex
  We thrive on complexity. With a huge range of reporting frameworks, data points and scoring systems, we’re well suited to tackle the complexities of this topic.
• ESG has potential
  We pioneer to deliver ground-breaking work. We see a great opportunity to improve upon the typical ways that ESG data is currently communicated.

Our impressions

At CLEVER°FRANKE, we regularly engage with new domains, data types, and specialized areas. In exploring the ESG domain, we sought to understand how sustainability is measured. We were struck by a complex web of various actors, regulations, and proprietary information, little to none of which caters to the needs of the general public.

• Information is inaccessible
  Information is often proprietary, fragmented, or behind pay-walls. Publicly available data requires expert knowledge, and perseverance to understand.
• Greenwashing is widespread
  From omitting data and adjusting targets to making empty claims and failing to address shortfalls, companies are often held accountable only to their own standards.
• It’s nearly impossible to compare
  A lack of standardization across frameworks and scoring systems makes it impossible to compare across different companies or industries.

Our vision

We believe that data should help people understand the world around them. In our view, the ESG domain ought to be:

• Accessible
  By definition, ESG data impacts our world. We want information to be accessible to a wider audience beyond industry experts & investors.
• Transparent
  ESG data should be complete, accurate, and verifiable. Greater transparency builds accountability, and ensures legitimate progress.
• Comparable
  Consistent reporting will reduce complexity, level the playing field for companies, and enable consumers to make informed choices.

How can design make a difference?

As data designers, our expertise lies in translating complex data into meaningful, insightful experiences. We set out to analyze how ESG is currently presented, and investigate how design can make ESG more accessible, transparent and comparable.

We analyzed three components of ESG: Metrics represent the most detailed view of this data, and are consolidated into extensive reports by the companies themselves. ESG reports, along with other forms of disclosure, are evaluated by external bodies to assign an ESG score. We explored the design choices across each to better understand the existing landscape.

ESG Scores

Sources suggest there may be as many as 600+ different ESG scoring systems. We focused on a number of scoring systems that were regularly cited and referenced, and crucially, that had information available that outlined their methodology. We compared their design choices in terms of:

• Content
• Terminology
• Color
• Visual form

Example ESG scores for LVMH from Sustainalytics, MSCI, and LSEG (left to right)

Content

We analyzed the content and hierarchy to understand which information scoring companies prioritize. They were generally consistent, prioritizing the following data:

• Given score
• A breakdown across each pillar of E, S and G,
• An industry comparison or an allocation per issue.

Despite presenting the same content, each scoring system chose different visual-communication techniques.

Terminology

Each scoring company uses different terminology to communicate the score itself, ranging from numbers to letters to grades. Some scoring systems evaluate performance, others evaluate risk.

Mapping terminology used to communicate ESG scores

These inconsistencies in terminology make it challenging to compare their findings and as a result, any limited understanding of one system cannot be applied to another.

Color

We found that each ESG scoring system employed a unique color scale, including a wide range of hues and combining both diverging, sequential, classed and unclassed palettes.

Mapping use of color across different scoring companies

Color is an important part of interpreting data. In data visualization, data is typically classified as sequential, divergent, or categorical, each of which has a corresponding color palette.

Examples of different color palettes

Unclassed data represents values along a continuous gradient or spectrum.

Classed data is organized into distinct steps, categories or buckets.

Sequential data is best visualized using a color palette that varies uniformly in lightness, saturation or hue, ordered to effectively represent progression or magnitude.

Divergent data is best visualized with a split color palette centered on a neutral midpoint, highlighting variations above and below a median value.

Differences in color through hue, palette, and classification not only makes the results harder to interpret and understand but also hinders meaningful comparisons of their findings.

Visual form

ESG scoring companies present their grading systems and score breakdowns using various visual forms, from bullet charts to sunbursts. Each format has its merits and limitations, revealing different focuses on the data.

Analyzing visualizations across different scoring systems

Our work at CLEVER°FRANKE often involves determining which type of chart is most appropriate for the data, and creating custom visualizations to support it.

Below are abstracted versions of some of the visual forms we encountered, with examples of the data types they’re most appropriate for, and some of their limitations.

Abstracted ESG Scoring Visuals — comparison between the three different chart forms is near impossible.

The choice of chart can vary significantly based on the audience, intent, and data involved. When assessing the ESG impact of a single company, however, the variability in visualization techniques, terminology, and color schemes can lead to differing interpretations of the scores. This inconsistency highlights the importance of careful chart selection and presentation, as it can significantly influence understanding and perception of a company’s ESG performance.

Key takeaway

When comparing all these elements of ESG scores, the most significant takeaway was the total lack of consistency. Whilst we can assume that market competition and slight variation in audience drives them to differentiate themselves from each other, the true failure is the inability for non-experts to interpret them, or make comparisons between them.

An example of consistent grading can be found within the energy sector. Whilst there are some differences in how scores are visualized between countries, strong similarities enable a degree of comparison.

Energy Labels (sourced from International Energy Label Toolkit, Insights into Energy Labels)

This example of consistency in visual communication has persisted around the world for almost thirty years, giving consumers time to become familiar with the system and build understanding of what it represents.

For more information on our work with ESG, visit cleverfranke.com/esg.