2025 ESG Gap Analysis Template

For those of us basking in the glory of meeting our 2024 ESG reporting deadlines, I regret to inform you that it’s almost time to gear up again.

I know, I know...it feels like we just finished! But while you may understandably be reluctant to reopen that dusty desktop folder you had been living out of not too long ago (and which you were all too happy to finally close), it’s never too early to start planning.

So let’s make this a little bit easier and start with something achievable: an annual ESG gap analysis.

An ESG gap analysis is a valuable tool that can help you take a step back, understand how you’re doing, and identify where you should invest more time and resources. Used in conjunction with a materiality assessment, a gap analysis can help you quickly determine the topics and considerations relating to ESG that should rise to the top of your list, allowing you to craft a meaningful action plan.

And while it can be helpful to differentiate your ESG programming gaps (i.e. your activities) from your ESG reporting gaps, we believe that both of these concepts inherently inform one another and should be considered as two sides of the same coin. ESG reporting and disclosure requirements can serve as a blueprint for your broader ESG program, helping you structure and refine your efforts and revealing what your focus areas should be.

Below, we’ll walk you through a step-by-step process to identify key ESG priorities and information gaps so that you can identify the proper set of actions to take as you look ahead to next year. This high-level framework can serve as a starting point for taking inventory of where your ESG program stands today – and where you should take it tomorrow.

Remember: there is no single right way to approach ESG; every organization is different. Let our suggestions be a guide and tailor them to your circumstances as needed. Let’s get into it!

Step 1: Rank ESG Topics for Disclosure by Order of Importance

As with many things, we recommended starting your ESG gap analysis at the highest level and working your way down.

To start, jot down all of the ESG topics relevant to your business that you may be required to report on, and rank them in order of importance.

Here’s an example of what that might look like:

Table 1: ESG Topics

The goal is to create a list you can quickly scan through to see which topics rank as top priorities and which don’t. It can also be helpful to make note of topics where you have already made significant progress, and ones which may require a bit more attention going forward. And remember: you can’t do everything at once, so if you start to get overwhelmed with competing priorities, refer back to your materiality assessment to ensure you stay laser-focused on the topics that matter most.

Step 2: Note the Gaps (and Overlaps) in Your Strategy

Before springing into action, we advise that you next take the time to conduct an ESG disclosure gap analysis. This will allow you to catalogue the specific outcomes and key performance metrics you may be required to disclose, whether for voluntary disclosures and frameworks or for mandatory compliance purposes. Remember: disclosures inform actions, and vice versa – especially in the ESG world. From here, you will be able to easily identify gaps and overlaps in the information needed to satisfy the requirements of various ESG disclosures and benchmarks.

In the example below, we’ve taken our top “E” topic from Step 1 (Energy Management) and provided examples of relevant disclosures and frameworks – and the key performance metrics that each encompasses:

Table 2: Energy Management Metrics

You can do this for all relevant ESG topics and frameworks to figure out which frameworks you should disclose to – or perhaps you already have an idea of the frameworks you’d like to focus on (e.g. GRESB and CDP) and want to limit this exercise accordingly. Either way, by identifying the gaps and overlaps between the metrics required for various disclosures, you can begin to understand the level of effort that each disclosure will require and what data you’ll need to collect in order to comply.

As you conduct this step, remember that many of the frameworks and disclosures mentioned above frequently update their requirements to align with evolving regulations and best practices. So, be sure to double-check whether your preferred frameworks have released updates for the upcoming year before finalizing your plan!

Step 3: Take Inventory of Your Internal Capabilities

Once you’ve identified your key priorities and gaps, it’s time to take a step back and assess your internal capabilities.This will help you understand what you can reasonably accomplish with your existing resources and what might require external support.

To do this, we recommend working with your internal teams to assess where you currently stand with respect to the following:

1. Data Collection and Management:
2. • Do you have robust systems and processes in place to collect, manage, and analyze ESG data across your organization?
   • Are there gaps in data availability or accuracy that need to be addressed?
2. Subject Matter Expertise:

• • Do you have internal experts who understand the ESG topics and frameworks that are most relevant to your business?
  • Are there areas where you need additional training or external consultation?

1. Reporting Tools and Technology:
2. • Do you have access to the tools and technology you need to efficiently prepare and publish ESG disclosures?
   • Are there opportunities to automate or streamline your reporting processes?
2. Organizational Buy-In:
3. • Is your leadership team fully aligned on the importance of ESG and supportive of your initiatives?
   • Do you have a clear governance structure for ESG that enables cross-functional collaboration and accountability?

By taking inventory of these internal capabilities, you can identify areas where you may need to invest in additional resources or build stronger processes to support your ESG goals.

Step 4: Develop an Action Plan

Now that you’ve identified your key priorities, gaps, and internal capabilities, it’s time to develop an action plan.

This plan should outline the specific steps you’ll take to address your ESG gaps and achieve your disclosure goals. It should also include a clear timeline and assign responsibilities to the appropriate teams or individuals.

Here are some key elements to include in your action plan:

1. Objectives:
2. • What are the specific ESG goals you want to achieve in the coming year?
2. Milestones:
3. • What are the major milestones or deadlines you need to meet?
   • How will you measure progress along the way?
3. Resource Allocation:
4. • What resources (e.g., budget, personnel, technology) will you need to execute your plan?
   • How will you allocate these resources effectively?
4. Communication Plan:
5. • How will you communicate your ESG priorities and progress to internal and external stakeholders?
   • What messaging and channels will you use?

Remember, your action plan should be flexible enough to adapt to changing circumstances and new developments. ESG is an evolving field, and staying nimble will help you stay ahead of the curve.

Step 5: Monitor and Evaluate Progress

Finally, it’s important to continuously monitor and evaluate your progress to ensure that you’re on track to achieve your ESG goals.

This involves regularly reviewing your action plan, tracking key performance indicators (KPIs), and identifying opportunities for improvement. It can also be helpful to establish a feedback loop with your stakeholders to gather insights and refine your approach over time.

Some questions to ask during this process include:

• Are we meeting our milestones and deadlines?
• Are our ESG initiatives having the desired impact?
• Are there any emerging trends or regulatory changes we need to address?

By staying proactive and focused on continuous improvement, you can build a strong foundation for ESG success and position your organization as a leader in sustainability and responsible business practices.

In Conclusion

Conducting an annual ESG gap analysis may not be the most glamorous task, but it’s an essential step in building a strong and effective ESG program. By taking the time to identify your key priorities, gaps, and capabilities, you can develop a clear roadmap for achieving your ESG goals and creating long-term value for your stakeholders.

Remember, ESG is a journey, not a destination. So, take it one step at a time, celebrate your progress along the way, and don’t hesitate to seek support when needed. Here’s to a successful year of ESG reporting and action ahead!

About Noda

Noda is a data and analytics company on a mission to make every building smarter, more efficient, and more sustainable. Recently ranked in the top 10 tech companies leading the charge on climate action, its AI-powered suite of products surface unique insights that empower real estate teams to reduce costs, decrease time spent on routine work, and find and act on opportunities to save energy and carbon. Discover how Noda's solutions can unlock the potential of your assets and accelerate the transition to net zero. Visit us at noda.ai to learn more.