Several encouraging developments for you from the (1) capital markets community and (2) the corporate sector and (3) the combining of forces of each.To start: Morgan Stanley has become the first major U.S. bank to join the Partnership for Carbon Accounting Financials and will begin measuring and disclosing the emissions generated by the businesses that it lends to and invests in.
The popular corporate equity “baskets” including: the Dow Jones Industrial Index, Nasdaq 100, S&P 500, the Russell 1,000 - 2,000 - and 3,000– in essence consists of the underlying value of the corporate shares. Today, there is an ocean of stock indexes for asset managers to license from the creators and then apply process and approaches for keeping track of the companies in the fiduciary portfolio, or to analyze and pick from the underlying issues for their portfolio.
Two heavyweights in the corporate reporting frameworks/standards arena have announced intentions to move closer to help promote “clarity and comparability in the sustainability landscape” – GRI and SASB.
The two organizations just announced a collaborative work plan to demonstrate how some companies have used both sets of corporate ESG reporting standards…together -- and lessons to share for reporters.
For almost a decade in this newsletter we’ve brought to you a steady stream of news, research and experts’ perspectives that focus on two related subject areas: (1) the escalating interest in the investment community in corporate ESG factors and adoption of sustainable investing approaches and (2) the corporate response, clearly in recognition of the intensifying competition for capital and so exerting efforts to excel in ESG strategy-setting, operational performance and disclosure.
“The United Nations” began as a World War II era concept as President Franklin D. Roosevelt talked about the allies of the United States partnering in the fight to save democracy and collectively battling the regimes of fascist dictators in Europe and Asia. On January 1, 1942, 26 nations “united” in Washington DC to battle the “Axis” powers. In February the president addressed the nation in his 20th “fireside chat” (broadcasting nationwide on the radio) to talk about the progress of the war.
Questions: What about the dramatically-increasing corporate ESG / sustainability / responsibility / citizenship disclosure and reporting? Should it be regulated? How? What would be regulated in terms of disclosure and reporting – what should the guidelines for issuers be? Does this topic become an important part of the SEC’s ongoing Reg FD (disclosure) revamping? What do investors want? What do companies want? Many questions!
As the global coronavirus pandemic continues to uproot our normal business, financial, economic and personal pursuits, questions that we could logically ask are (1) what impact does the virus crisis have on the ongoing corporate sustainability / ESG / citizenship efforts; and (2) what is the investor reaction – does the move into more sustainable / ESG investment vehicles continue?
Some answers come from Sanghamitra Saha, of Zack’s, writing in Yahoo Finance – “Here’s Why ESG ETFs Are Hot Amid Pandemic”.
Shorthand terms do matter – the “titling” of certain developments can sum up trends we should be tuning in to. Some examples for today: Sustainable Capitalism - Stakeholder Primacy – Sustainable Investing – Corporate Sustainability. Corporate ESG Performance Factors.
