Why Every ESG Roadmap Should Start with a Gap Assessment

What Is an ESG Gap Assessment (And Why It Matters)?

Using well-known standards like IWA 48, GRI, and CSRD, ESG gap assessment process finds performance gaps and maturity levels in dozens of ESG areas, such as human rights due diligence, reporting waste, and leadership role.

Why does this matter? Because ESG transformation requires more than storytelling. It demands structure, accountability, and continuous improvement. With a well-executed gap assessment, you get:

• A maturity score showing your ESG strengths and weaknesses.
• A detailed roadmap for closing gaps.
• Tailored, practical recommendations.
• Benchmarks against industry peers.

It's the ESG equivalent of a diagnostic check-up — without which no credible long-term strategy can take root. Conducting a thorough gap assessment provides the necessary foundation for developing meaningful sustainability initiatives and tracking progress over time.

The ESG Gap Assessment Framework: What to Analyze

Based on the IWA 48:2024 standard, the ESG Gap Assessment Framework covers seven core areas. Here's a breakdown of each:

ESG Governance & Strategy

Are ESG roles and responsibilities defined across the organization? Does the board actively oversee sustainability risks? Are ESG metrics embedded in executive KPIs?

Materiality & Stakeholder Relevance

Has the company performed a double materiality assessment? Are stakeholder inputs captured and prioritized? Is the materiality process updated regularly?

Environmental Stewardship

This includes emissions tracking, water and energy management, circular economy practices, biodiversity protection, and transparent reporting of environmental KPIs.

Social Responsibility

Are labor rights upheld? Is diversity tracked in leadership? Are community impacts measured, and are vulnerable groups included in stakeholder engagement?

Corporate Governance

Does ESG factor into board decisions? Is executive compensation linked to ESG performance? Are there whistleblower protections and ethics policies in place?

Reporting & Assurance

Is ESG data verified by a third party? Are assumptions and uncertainties disclosed? Does reporting balance achievements with setbacks?

Continuous Improvement & Benchmarking

Are gaps routinely identified and acted on? Is ESG progress benchmarked against peers? Does the organization learn from past initiatives?

Applying the Framework: A Real-World Look at Danone's ESG Gap Assessment

Intro to the Checklist

Danone's 2023 ESG report was assessed using a 200+ point checklist aligned with IWA 48. The framework applied audit questions across all seven domains to calculate an overall ESG maturity score and highlight specific improvement areas.

Applied to Danone's 2023 ESG Reports

Danone scored an impressive 4.5 out of 5, signaling high ESG maturity. The company excels in areas like:

• ESG governance structures, including a CEO-led Climate Committee and board-level oversight.
• Integration of double materiality into strategy and disclosure.
• Climate commitments with science-based targets and transparent GHG data.

Yet even industry leaders have gaps. For Danone, these included:

• Stakeholder engagement: Missing accessible formats and lack of detailed participation records for vulnerable groups.
• ESG accountability: Consequences for non-executive ESG lapses were undefined.
• Assurance: Limited third-party validation — not all ESG data was externally assured.
• Accessibility: Few metrics on whether Danone's communications and products are accessible to all demographics.
• Biodiversity: Investments were not tracked quantitatively or disclosed as a KPI.
• Data transparency: Methodologies and assumptions for environmental KPIs were brief and could be more rigorous.

Findings and Insights

Danone's assessment shows that even mature ESG performers need continual refinement. Three key lessons emerge:

• Governance Must Go Beyond the C-Suite: While Danone's top leadership is ESG-savvy, broader organizational accountability is less defined. Embedding ESG into all layers of the company — not just the boardroom — remains a frontier.
• Inclusion Requires Structure, Not Just Intention: Stakeholder engagement was present but not always inclusive or well-documented. ESG leaders must intentionally design for accessibility, especially when engaging marginalized communities.
• Transparency Is a Moving Target: Danone disclosed a lot — but didn't always explain how it calculated things. Without clear assumptions and methods, even good data loses credibility. Third-party assurance and full-method transparency can close this trust gap.

Conclusion

Sustainability is a journey, not a performance. The most successful ESG strategies don't start with ambitions — they start with clarity. By conducting a rigorous gap assessment, companies like Danone (and those aspiring to follow) gain a grounded understanding of their ESG reality. They see where they shine, where they lag, and how to move forward with confidence.

Remember that even organizations with mature ESG programs have areas for improvement. The key is to establish a systematic approach that allows for continuous improvement and adaptation to evolving ESG standards and stakeholder expectations. A comprehensive gap assessment provides the foundation for this systematic approach, ensuring that ESG initiatives are targeted, measurable, and aligned with broader business objectives.