Gustavo Bernal Torres
Simplified Frameworks, New Forums, OECD's Outlook, and CFA Institute on Trust
Here are 5 things you might have missed this week:
PRI Launches Redesigned Reporting Framework for Investors-
A new redesigned framework for signatory investors to use in their annual reporting to the PRI regarding their responsible investment activities.
According to the PRI, the launch marks the culmination of a two-year process aimed at developing a framework that not only has more challenging reporting requirements, but is also simpler for signatories to report on, shorter and more consistent in its structure, and that delivers more flexible and meaningful reporting outputs.
The new simplified structure introduces “core” and “plus” questions:
Core questions, which make up the bulk of the framework, are mandatory to report on and are publicly disclosed and assessed. More responsible investment practices are also now captured in the “core” questions.
Plus questions are voluntary to report on and disclose and are not assessed. They are often open questions to give signatories an opportunity to demonstrate more advanced practices that might not as yet be widely adopted.
GRI Launches Forum to Align Corporate Reporting with SDG Action-
The GRI Business Leadership Forum aims to leverage the power of corporate reporting to drive action towards the UN SDGs.
GRI reporting organizations around the world can now sign up for the two-year program, which will start in March 2021.
The forum will provide practical support on identifying and understanding different stakeholder needs, and opportunities to demonstrate sustainability leadership by contributing to a series of sessions.
The CFA Institute Investor Trust Study-
In its fourth edition, the study examines how trust in the industry has evolved, while the essential characteristics of trust endure.
The study shows that institutional investors are more likely to consider ESG investing as a way to generate higher risk-adjusted returns, while retail investors mostly look to ESG to express their personal values.
The factors that influence trust vary and trust is not given uniformly across markets. For example, related to ESG, in Singapore, 81% of surveyed investors prioritize improving returns in their ESG assessments over reducing portfolio risk.
OECD's Global Outlook on Financing Sustainable Development 2021-
In 2020, external financing to developing countries is estimated to drop by $700 billion, increasing the annual SDG financing gap by 1.7 trillion dollars, or 70%.
The OECD calls for collective action to address both the short-term collapse in resources of developing countries as well as long-term strategies to build back better following the outbreak of the COVID-19 pandemic.
The report demonstrates that progress to leave no one behind has since reversed, and the international community faces unprecedented challenges to implement the holistic financing strategy set out in the Addis Ababa Action Agenda (AAAA).
The Return on Purpose: Before and During a Crisis-
The document analyzes how corporate purpose relates to a company's financial performance, market valuation, and shareholder value creation.
Companies that scored high on corporate purpose metrics outperformed their low-scoring counterparts on common measures of financial performance, market valuation, and shareholder value creation.
The COVID crisis provided another important insight: the valuation and value creation advantage for companies scoring high on corporate purpose widened, sometimes materially, as the crisis developed and progressed.
We find that the average EBITDA valuation multiple earned by High Purpose brands is over 4 turns higher than that of Low Purpose brands. If sustained over time, this means High Purpose brands would double their market value over 4x faster than Low Purpose brands.
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