Corporate Boards, Impact Investing Performance, Fashion, and more Reporting
Here are 5 ESG insights you might have missed this week:
Reporting on Enterprise Value: Illustrated with a Prototype Climate-Related Financial Disclosures-
Five leading organisations in sustainability and integrated reporting, have published a shared vision for a comprehensive corporate reporting system.
CDP, the Climate Disclosure Standards Board (CDSB), the Global Reporting Initiative (GRI), the International Integrated Reporting Council (IIRC) and the Sustainability Accounting Standards Board (SASB), have co-authored an illustration of how their current frameworks, standards and platforms, along with the elements set out by the Task Force on Climate-related Financial Disclosures (TCFD), can be used together to provide a “running start” for development of global standards that enable disclosure of how sustainability matters create or erode enterprise value.
The paper builds on the shared vision for a comprehensive corporate reporting system that was set out in a joint statement of intent in September 2020 by addressing one part of this system: standards for reporting on enterprise value, brought to life with a prototype climate-related financial disclosure standard.
U.S. Corporate Boards Suffer from Inadequate Expertise in Financially Material ESG Matters-
A case study highlighting the importance of ESG and supply chain management in the fashion sector and the impact on share price and investors.
The authors reviewed 1188 individual Fortune 100 board member credentials to determine whether companies with material ESG risks and opportunities had relevant expertise on their boards.
They found that very few sectors and very few companies were adequately prepared at the board level for issues that were already affecting their performance -- for example, one property and casualty insurance company has no environmental expertise on the board in a year experiencing $100 billion in damage caused by climate change--heightened extreme weather events. On another issue of growing materiality, cyber/telecom security, just eight directors of 1188 had expertise. They also examined COVID-19 and Black Lives Matter as related to board credentials and make recommendations on how to improve board ESG governance.
Sustainable ETF Assets Jump but Most Funds Fall Short on UN Goals-
A new tool developed with Unctad aims to counter practice of ‘green washing’.
Assets under management in ESG ETFs jumped three-fold from just under $59bn at the end of 2019 to just over $174bn at the close of 2020, a rise of nearly 200 per cent, according to data from TrackInsight, the Financial Times’ data partner for the ETF Hub.
The United Nations Conference on Trade and Development (Unctad) has collaborated with TrackInsight to produce a tool that helps investors to search for ETFs that are directly aligned with SDGs.
PRI's Investor Reporting Guidance-
The 2021 PRI reporting cycle will go live in the week of 1 February for investors. Signatories are encouraged to start preparing for the reporting cycle the following guidance.
The scoring methodology for the 2021 Reporting Framework has been recalibrated to make assessment more challenging. Scores will continue to be confidential, and be provided per module or asset class, with no overall organisation score given.
Mandatory reporting modules include: Senior Leadership Statement, Organisational Overview, and Investment and Stewardship Policy (including climate indicators).
Reporting modules mandatory for organisations that invest in the asset class and meet the AUM threshold include: Manager Selection, Appointment, and Monitoring (SAM), and Asset Class Specific modules.
Voluntary reporting modules include: Sustainability Outcomes.
Impact Investing Decision-Making: Insights on Financial Performance-
The Global Impact Investing Network (GIIN) explores investment decision-making strategies at various impact investment funds.
The report finds that impact investors are applying a multi-dimensional approach to decision-making, considering impact objectives and impact risks alongside traditional factors such as financial return, financial risk, resource capacity, and liquidity constraints.
The report confirms earlier findings from the GIIN’s research around financial performance of private debt, private equity, and real assets and expands on this research to focus on various facets of impact investment performance, including risk, financial return, and impact.
One more thing: From IHS Markit, a case study highlighting the importance of ESG and supply chain management in the fashion sector and the impact on share price and investors.
Do share your comments or the content you think our community should not miss!