Conducting a Peer Benchmarking Exercise
Why peer benchmarking comes first
Before you touch a single data sheet or draft a table of contents, you need to understand what the market expects. Peer benchmarking tells you what comparable companies are reporting, how they structure their reports, and which standards they reference. It is step one of the process for a reason: it shapes every decision that follows.
Why You Start Here
When a client says "we want an ESG report," their next question is almost always: "What are our peers doing?" Sometimes they ask it directly. Sometimes they phrase it as "we want to be at par with the industry." Either way, the answer comes from benchmarking.
Peer benchmarking serves three practical purposes:
- It sets expectations. It shows the client what a report in their industry typically looks like: the length, the structure, the level of detail. This prevents scope creep later because you have a reference point.
- It narrows your indicator list. Instead of presenting the full GRI suite (which is overwhelming), you can say: "Your top five peers all report on these 15 indicators. Here is what we recommend."
- It reveals gaps and opportunities. If every peer reports on water stewardship but your client does not track water data at all, that is a gap you need to flag early, not discover halfway through the writing process.
Here is the honest truth: everyone in the same industry reports roughly the same things. The content overlap between two sustainability reports in the same sector is easily 70-80%. What changes is the design, the language, the depth of narrative, and the specific data points. Benchmarking helps you see this pattern quickly so you are not reinventing the wheel.
How to Select Peers
Selecting the right peers matters more than selecting many peers. A common mistake is grabbing ten random companies and calling it a benchmark. You want comparability, not volume.
Here is how to choose:
- Same industry or sub-industry. A cement company should benchmark against other cement companies, not "construction" broadly. The more specific, the more useful.
- Similar geography. Reporting norms differ by region. An Indian company benchmarking only against European peers will set unrealistic expectations (European reports tend to be longer and more detailed due to CSRD pressure). Include at least some domestic peers.
- Similar size. A mid-cap company benchmarking against the top three global players in their sector will feel inadequate. Match the scale.
- Publicly reporting. This is obvious, but you can only benchmark against companies whose reports are publicly available. Most sustainability reports are published on the company website, and databases like the GRI Standards Reporting Database or CDP responses can help.
- 4-6 peers is the sweet spot. Fewer than three gives you too narrow a view. More than eight and the exercise takes longer than it should without adding proportional value.
Think of it like house hunting
When you buy a house, you look at comparable sales in the same neighborhood, not mansions in another city. Peer benchmarking works the same way. You want to know what "normal" looks like for companies in your client's specific market, size, and geography. That is your baseline. Everything the client does beyond that baseline becomes a differentiator.
What to Look For in Each Peer Report
When you sit down with a peer's sustainability report, you are not reading it cover to cover for enjoyment. You are extracting specific information. Here is what to capture:
| Dimension | What to Note | Why It Matters |
|---|---|---|
| Standards referenced | GRI? SASB? TCFD? IFRS? CDP? Multiple? | Tells you what the market baseline is for standard selection |
| Report structure | Chapter order, what sections exist, how E/S/G is organized | Informs your table of contents and blueprint |
| Topics covered | Which GRI topics, which material issues | Directly feeds your indicator selection |
| Data depth | How many years of data? What metrics? Charts vs. tables? | Sets client expectations on what data they need |
| Design and length | Page count, visual style, narrative-to-data ratio | Helps with design brief and setting scope |
| Materiality approach | Single or double materiality? How is the matrix presented? | Guides your materiality discussion |
| Unique elements | Anything distinctive: microsites, interactive features, case studies | Potential "innovation" to suggest to the client |
From Benchmarking to Indicator Selection
The most practical output of benchmarking is a shortlist of GRI indicators. Rather than presenting the client with the full GRI Standards catalog (which runs to hundreds of pages and dozens of topic-specific standards), you present only what is relevant.
The logic is straightforward:
- If four out of five peers report on GRI 302 (Energy), your client should too.
- If none of the peers report on GRI 304 (Biodiversity) and the client is not in a biodiversity-sensitive industry, you can likely skip it.
- If the client's materiality assessment highlights a topic that peers are not reporting, that is worth a conversation: it could be a differentiator or it could be misplaced effort.
This shortlisting feeds directly into the data requirement sheet (covered in Module 3). You are essentially building the template from the benchmarking output.
Worked example: Benchmarking a mid-size Indian IT services company
You pick five peers: three Indian IT companies of similar revenue and two global IT services firms. After reviewing their reports, you find:
- All five reference GRI as the primary framework; three also index against SASB
- Average report length: 80-120 pages
- All five report on: Energy (302), Emissions (305), Employment (401), Training (404), Diversity (405), Anti-corruption (205)
- Three of five report on: Water (303), Waste (306), Customer Privacy (418)
- None report on: Biodiversity (304) or Land Degradation
- Four of five include a double materiality matrix
Your recommendation to the client: follow GRI, index against SASB for the Technology & Communications sector, include all six common indicators plus Water and Waste (since they are becoming standard), skip Biodiversity, and conduct a double materiality assessment. Report target length: 80-100 pages.
A Few Things Benchmarking Will Not Tell You
Benchmarking is powerful, but it has limits. Keep these in mind:
- It will not tell you what your client's unique story is. Every company has a different sustainability journey. Peers give you the structure, but the narrative has to come from the client's own operations, strategy, and data.
- It will not guarantee data availability. Just because a peer reports Scope 3 emissions does not mean your client has the data to do the same. Benchmarking identifies what "should" be reported; the data collection phase determines what "can" be reported.
- It can create a false ceiling. If all peers are mediocre reporters, benchmarking against them will produce a mediocre report. Sometimes you need to look outside the immediate peer set (at best-in-class reporters from adjacent industries) to push the quality higher.
Key Takeaways
- 1Always start the reporting process with peer benchmarking - it shapes standard selection, indicator scope, report structure, and client expectations
- 2Select 4-6 peers matched by industry, geography, and size for the most useful comparison
- 3Extract seven dimensions from each peer report: standards referenced, structure, topics covered, data depth, design, materiality approach, and unique elements
- 4Use benchmarking output to shortlist GRI indicators rather than presenting the full catalog - 70-80% of content overlaps within an industry
- 5Benchmarking reveals gaps (topics peers cover but the client does not track) and opportunities (differentiators the client can lead on)
- 6Benchmarking sets the baseline, not the ceiling - look beyond immediate peers at best-in-class reporters to raise quality