ESG Assessment

An ESG assessment is a systematic evaluation of a company's sustainability performance across three dimensions: Environmental, Social, and Governance. Companies need an ESG assessment for several reasons:Regulatory obligation: The CSRD progressively requires more companies to report on sustainability under ESRS from 2025/2026 onwards. An ESG assessment forms the foundation for this report.Investor requirements: Institutional investors and banks increasingly use ESG evaluations as criteria for capital allocation and lending conditions.Risk mitigation: ESG risks such as climate change, supply chain issues, or governance weaknesses can have significant financial impacts. An assessment identifies these early.Competitive advantage: Companies with transparent ESG performance achieve better financing conditions and strengthen their market position.ADVISORIs ESG assessment covers materiality analysis, performance evaluation, gap analysis, and the development of a strategic roadmap.

The ESG assessment at ADVISORI follows a structured five-phase process:1. Scoping and stakeholder mapping: Identification of relevant ESG topics for your industry and business model. Double materiality analysis per CSRD requirements, considering both impact and financial materiality.2. Data collection and current state analysis: Systematic capture of quantitative and qualitative ESG data. Evaluation of current performance against international standards such as GRI, SASB, and EU Taxonomy.3. Benchmark analysis and gap identification: Comparison with industry benchmarks and leading ESG rating criteria. Identification of concrete action areas and improvement potential.4. ESG KPI development: Definition of measurable indicators for continuous management of your sustainability performance. Setup of a monitoring system for ongoing oversight.5. Strategic roadmap: Creation of a prioritised action plan with clear responsibilities, timelines, and measurable targets.A typical ESG assessment takes between

8 and

16 weeks depending on company size.

ADVISORI considers all relevant standards and frameworks in an ESG assessment:CSRD/ESRS: The European sustainability reporting standards form the regulatory framework for double materiality analysis and disclosure obligations.GRI Standards: The Global Reporting Initiative standard is the most widely used framework for sustainability reporting worldwide.SASB Standards: Industry-specific standards from the Sustainability Accounting Standards Board focusing on financial materiality.EU Taxonomy: Classification system for environmentally sustainable economic activities, relevant for taxonomy alignment and green finance.TCFD/ISSB: Recommendations for climate-related financial disclosures and the IFRS Sustainability Standards.ESG rating methodologies: Criteria from MSCI, Sustainalytics, ISS ESG, and EcoVadis feed into the gap analysis.The selection of relevant standards is tailored individually based on your industry, company size, and stakeholder requirements.

These three terms describe different instruments for sustainability evaluation:ESG Assessment: A comprehensive review and evaluation of a company's ESG performance. It is the first step to understanding the current state, identifying gaps, and developing an improvement strategy. An assessment is typically conducted internally or by consultants.ESG Rating: An external evaluation by specialised rating agencies such as MSCI, Sustainalytics, or ISS ESG. Ratings primarily serve investors as a decision-making basis and compare companies within their industry. The ESG assessment provides the data foundation to systematically work towards better ratings.ESG Audit: A formal review of ESG reporting and processes, often by auditing firms. The audit confirms the reliability of reported ESG data and is increasingly legally required (Limited/Reasonable Assurance under CSRD).ADVISORIs ESG assessment forms the foundation for better ratings and successful audits.

An ESG assessment identifies risks across all three sustainability dimensions:Environmental risks: Climate change-related physical and transition risks, CO 2 emissions and Scope 1/2/3 exposure, resource consumption and dependencies, environmental pollution and regulatory tightening.Social risks: Working conditions and human rights issues in the supply chain, diversity and inclusion, data protection and information security, health and safety in the workplace.Governance risks: Board structure and independence, remuneration policy and incentive systems, corruption prevention and compliance, tax transparency and lobbying activities.Each identified risk is evaluated by probability of occurrence and potential financial impact. ADVISORI uses the double materiality methodology under CSRD, which considers both the company's impact on the environment and society as well as the financial risks to the company.

The duration and effort of an ESG assessment depend on company size and business complexity:Small and medium-sized enterprises (SMEs): Typically

6 to

10 weeks for a complete assessment. The focus is on the most material ESG topics and preparation for VSME standards or voluntary reporting.Mid-sized companies:

8 to

14 weeks, including comprehensive stakeholder surveys and detailed gap analysis against ESRS requirements.Large enterprises and groups:

12 to

20 weeks, with full double materiality analysis, group-wide data collection, and inclusion of multiple locations and business units.Costs are individually calculated based on scope. ADVISORI offers a no-obligation initial consultation to jointly define scope, timeline, and budget.

A professional ESG assessment is the most targeted way to systematically improve ESG ratings:Gap analysis against rating criteria: ADVISORI understands the evaluation methodologies of leading ESG rating agencies (MSCI, Sustainalytics, ISS ESG, EcoVadis) and analyses specifically where your company loses points.Data quality and disclosure: Many companies receive poor ratings not because of inadequate ESG performance, but because relevant information is not publicly accessible. The assessment identifies disclosure gaps.Prioritised measures: Rather than addressing all ESG topics simultaneously, the roadmap focuses on areas with the greatest rating impact.Experience shows that companies achieve measurable improvements in their ESG ratings within

12 to

18 months after a structured ESG assessment and implementation of prioritised measures.