How can public record and social media searches assist in ESG Due Diligence?
Unlike financial and management reports, public record searches and social media investigations can significantly enhance ESG due diligence by uncovering information related to a company’s environmental and governance practices as well as social behaviours. These tools could help investors gain a deeper understanding of a company’s reputation, risks, and compliance with ESG standards.
Public Record Searches
Public records may well uncover crucial information on legal, regulatory and environmental matters, which could be used to evaluate a company’s performance in ESG areas.
Litigation searches can provide insights into the effectiveness of a company’s management of social and governance matters through court decisions on the issues of poor employment practices, discrimination claims, or governance issues
Regulatory checks can help investors understand whether a company is compliant with local and international ESG-related regulations, such as employment rights laws or environmental standards. If a company breaches local or international laws protecting the environment, public records searches can reveal historic fines or legal actions for environmental violations, such as breaches of pollution or waste disposal laws.
Social Media Investigations
Social media searches have long been known to be beneficial as they can offer real-time insights into a company’s public perception and behaviour. This provides valuable information that may not be captured in formal reports such as annual financial statements or management reports.
Social media can uncover a company’s perception among employees, consumers and affected communities. Negative sentiment regarding a company’s environmental policies, employee treatment, or governance issues, including executive misconduct, on various platforms may indicate potential risks and issues. Sites such as LinkedIn or Glassdoor can provide valuable information regarding company culture, employment practices, and employee satisfaction, all of which are essential for evaluating the social component of ESG.
Watchdog groups, consumers, or even employees’ social media can shed light on issues in a company’s supply chain, such as poor working conditions, environmental hazards, or unethical sourcing practices.
Conclusion
By including public record searches and social media investigations in ESG due diligence, investors may better assess risks that may not be obvious from official documents or financial reports. This allows for better-informed judgements and aligns investments with both financial and ethical criteria.
Garancie has a long history of providing companies with often tailored ESG-focused investment due diligence utilising the power of public record searches and social media investigations.
