Five Strategies to Increase Sustainability Survey Submission Rates: The Challenger Case

If you’ve ever sent a sustainability survey, you know that getting companies to submit data can be an uphill battle. According to SurveyPlanet, the average response rate for a survey hovers between 5-30 percent, with response rates exceeding 50 percent considered above average. In the realm of sustainability surveys, the response rate typically ranges from 60-80 percent. From emerging regulations like the EU’s Sustainable Finance Disclosure Regulation (SFDR) to LP reporting requirements, it is increasingly expected for fund managers to strive for 100 percent portfolio participation.

Since Proof’s inception in 2019, we have conducted thousands of sustainability assessments and surveys, with the aim of gathering high-quality data to empower our clients to make informed business and sustainability decisions. With over 4,000 companies on Proof, we know a thing or two about how to enhance company participation and response rates, two ingredients necessary for a high-quality data collection effort.  

Are you ready to boost your submission rate? Learn about the common challenges that often lead to lower submission rates, and apply our five proven strategies to boost submission rates. Gain practical wisdom from Challenger, a leading trade finance fund that recently achieved an impressive 100% response rate among portfolio companies.

Key Challenges

Increasing engagement rates for sustainability surveys across your portfolio can feel like a game of herding cats, all of whom are extremely busy. We have found that organizations face five common challenges when distributing surveys:

1. Time Challenge

Many portfolio companies may not see the immediate value of investing time and effort in surveys when they are already overwhelmed with their daily operations.

2. Privacy and Security Concerns

Uncertainty about the privacy and security practices of the survey platform can deter companies from sharing sensitive private company data.

3. Data Availability

Portfolio companies often face the challenge of lacking the necessary sustainability data, rendering them unable to fulfill survey requirements. This data gap obstructs the comprehensive evaluation of their environmental, social, and governance (ESG) practices.

4. Limited Incentives

When companies have previoiusly encountered surveys with minimal or no incentives and have had past experiences that yielded no tangible benefits or feedback, they become less motivated to participate in sustainability surveys in the future.

5. Lack of Internal Resources

Smaller companies or those with limited personnel may struggle to assign someone to handle the survey.

Five Strategies to Increase Submission Rates

1. Confront the Time Challenge

Offer Immediate Value: Clearly communicate how participating in sustainability surveys can lead to immediate benefits, such as improved operations, enhanced reputation, and access to investors who prioritize sustainability.

Provide Flexible Timing: Provide sufficient heads up that a data collection effort is coming and provide clear and generous timelines to complete the effort. Typically 4-6 weeks is ideal.

Highlight Efficiency: Emphasize that the survey process is designed to be efficient and time-effective, expressing that we have the company’s busy schedule in mind.

2. Proactively Address Privacy and Security Concerns

Transparency: Clearly outline the platform's privacy and security measures, and provide detailed information about data protection practices to alleviate concerns.

Data Encryption: Ensure that data collected through surveys is encrypted and stored securely, and communicate this to reassure portfolio companies.

3. Support Company Data Availability

Simplify Surveys: Revise survey questions to be concise and straightforward. While brevity can be challenging with sustainability surveys due to the need for detailed metric definitions, it is crucial to simplify whenever possible.

Data Support and Guidance: Offer portfolio companies guidance and support in data collection and understanding the metrics. Companies require extra support to understand metric nuances, such as the difference between a FTE and an employee individual, how to estimate Scope 1-3 emissions, and how to calculate wage equity.

Standardized Reporting Frameworks: Encourage portfolio companies to adopt 1) standardized sustainability reporting frameworks and 2) reporting frameworks and metrics that are common in their industry.

4. Offer Compelling Incentives

Enhanced Incentives: Incentives for companies can be tangible (e.g., discounts, rewards, preferential terms, or access to resources) or intangible (e.g., improved investor and stakeholder relations, introductions to partners, investors, and clients).

Feedback Loop: Implement a feedback loop where companies receive constructive feedback and insights based on their survey responses, demonstrating the value of participation. All companies that complete a survey with Proof receive access to a performance dashboard summarizing their performance compared to global benchmarks. This tangible asset can be used to communicate with other investors and incentivizes portfolio participation.

5. Enable Internal Resources

Provide Support: Offer dedicated support to smaller companies or those with limited personnel, guiding them through the survey process and providing assistance in data collection.

Collaborative Approach: Encourage portfolio companies to collaborate internally, involving relevant team members to share the responsibility of survey completion.

Extend Timelines: If necessary, allow for extended survey completion timelines for companies with resource constraints, ensuring they have ample time to participate.

Case Study: Challenger Management

Despite these challenges, select investors have managed to drive submission rates to 100%. Let's take a closer look at how Proof client Challenger reached 100% completion and the most influential factors for their successful data collection effort.

Iain Sykes, Senior Deal Originator at Challenger, offers the following reflections on the inaugural reporting experience:
Challenger invests into collateralized, short-dated trade finance transactions, to generate a high-yielding return that is uncorrelated to other major asset classes. The fund focuses on financing exports from Africa and South America with most of our clients small and medium enterprises. Due to the operational intensity and nature of our funding, we have a very close working relationship with the clients and understanding of the business process. This made the engagement around the necessity and practicality of the data collection, establishment of timelines and ongoing text and email reminders, straightforward. The fact that our clients are also reliant on ongoing funding for their trades creates an incentive to complete compliance necessities.

Due to the geographies and sizes of the counterparties, the vast majority have not previously completed impact related reports. While the response rate was excellent, companies most commonly had difficulties in terms of calculating and reporting the more complicated metrics. Our detailed review of the Principal Adverse Impact Indicators (PAI Statement), SFDR’s mandatory metric set, highlighted these difficulties as well as some obvious areas for intervention. Rather than a negative, this provides Challenger with a unique opportunity to educate and positively alter impact fundamentals in sectors and markets that currently have very limited exposure.

At Proof, we've discovered that the initial reporting period presents an ideal opportunity to evaluate the availability of company data, assess reporting capabilities, and initiate easily achievable actions. For many clients, the first step after data collection involves acting on low-hanging fruit opportunities for improvement. For example, many investor clients evaluate which companies do not possess specific policy documents and then provide templates via Proof for companies to integrate the policies into company governance. Following the inaugural reporting period, it becomes pivotal to build upon the progress achieved and consistently offer companies the necessary feedback and support to fulfill future reporting requests.

Leveraging Sustainability Data for Financial Outperformance

In the ever-evolving landscape of private market investments, sustainability has emerged as a critical factor in capital allocation for LPs, GPs, and Founders. Engaging portfolio companies in sustainability surveys presents various challenges to attaining full participation. As demonstrated by Challenger, using best practices and techniques to drive response rates will provide higher quality data and a better experience for the companies completing the surveys. Proof remains committed to helping private market investors and companies navigate these challenges, enabling them to make data-driven, sustainable investment decisions.