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About Sustainability Ratings: CPAs Are Being Educated by Their Profession’s Journal – A Good First Effort to Push Information to All Levels of CPAs The professional CPAs working inside a public company, or in the outside accounting firm working with a company may or may not yet be involved in assisting corporate managers in responding to a growing number of third-party surveys focused on the company’s ESG strategies, actions and achievements. Responses to these periodic surveys and engagements by other means with the ratings and rankings organizations are increasingly shaping outcomes – that is, investor opinions of the company. Many more companies are now receiving surveys from and responding to a growing number of third-party ESG rating providers – and as we are told by our corporate connections, very often managers are straining under the effort to effectively respond given the breadth of information sought and the information available in the corporation. As we advise corporate managers, it is important to know that there is a publicly-available ESG profile of your company that investors are considering in various ways – and either you will shape the profile and tell the company’s sustainability progress story, or someone else will. That “someone else” would be the global universe of ESG rating providers -- and their output is directed to their investor clients. The ones who invest in, or could invest in, your company. Savvy corporate managers of course “get it” and really make the effort to effectively respond to as many queries and surveys as possible. But what about the internal financial managers and outside accountants – are they involved? At some firms, yes, and other firms no -- or not yet. The Big Four are tuned in to corporate ESG / sustainability disclosure and reporting. But many smaller CPA firms are not. And among small- and mid-cap publicly-traded firms, the role of the ratings and rankings service providers could still be an unknown and under-appreciated factor in shaping the firm’s reputation, valuation, access to and cost of capital, and other considerations. The article in the influential CPA Journal this month is a worthwhile attempt to educate professional CPAs, whatever their position. Five professors -- co-authors and colleagues at the Feliciano School of Business, Montclair State University -- explored the question, “Are Sustainability Rankings Consistent Across Rating Agencies?” One obvious element in the piece that we noticed is something happening in both the corporate sector and investment community: the fluid interchangeability of terms of reference. Is what is being explored by the ESG ratings and rankings service providers and their investor clients performance related to …CSR (corporate social responsibility)…ESG performance factors (environment/social/governance)…corporate sustainability…corporate citizenship…sustainable investing? Combinations? All of these? They cite the 2014 overview of rating agencies by Novethic Research (7 international rating agencies, 2 non-financial data providers, 8 specialized agencies and 20 local/regional agencies). Several studies and books are identified as reference sources. Specific CSR rankings examined for 2015 results: Newsweek’s Greenest Companies; Forbes Global 100 Most Sustainable Corporations; and, CSR Magazine Top 100 Global RepTrak companies. The three rankings cited are not as “investor decision-useful” as would be the analytical work of teams at such firms as MSCI, Sustainalytics, Institutional Shareholder Services (ISS); what was offered in 2015 doesn’t compare to the depth of ESG data available today via Bloomberg and T-R Eikon terminals; the RobecoSAM Corporate Sustainability Assessment (CSA) ratings that influence inclusion in the DJSI; and, volumes of information made available by CDP (formerly the Carbon Disclosure Project). The G&A Institute team assists corporate managers in responding to these important players and an ever-widening range of third-party ESG service providers. We'd like to share three basic observations with you and with CPAs: (1) the third party queries are becoming more probing in the information and data sought; (2) the corporate response effort is much more organized and thorough these days; (3) the results of both of these efforts are increasingly important to, and utilized by, the institutional investment community (both asset owners and their managers). So -- the more information that CPAs have about sustainable investing and corporate ESG performance the better equipped they’ll be to support their clients. The article is a good start in this regard. Top Story Are Sustainability Rankings Consistent Across Ratings Agencies?
Sustainability: Forward Momentum! 2022 FIFA World Cup to be a showcase of sustainability in Qatar The 8 attributes of successful sustainability leaders Move Over Sustainability Accounting, Here Comes Purpose Accounting Using ESG Ratings to Build a Sustainability Investing Strategy Why sustainability stacks up 3 Easy Concepts for Sustainable Packaging to Reduce Food Waste Sustainability Rocks! Top Music Festival CEO On Saving Radiohead And Partnering With The UN An integrated approach is needed toward sustainability GreenLink – Driving Sustainability And Social Change Through Blockchain Technology
A Range of ESG Topics & Issues – More Things For You to Think About -– What Will Be the Future Impact? Humans Are Causing Earth's Seasons To Change In A Way Never Seen Before Deadliest year on record for environmentalists: 207 activists were killed in 2017 while trying to protect land, watchdog warns Energy security must be high on the agenda Building An Ethics-First Employee Culture Is Crucial For All Leaders From the Corporate Sector - Both Positive & Negative – Headline Scans for You First, news and perspectives ABOUT the business community and sustainability for you – the important trends affecting the corporate sector. Oil companies rush to prove sustainability bona fides, as investors circle New report: Benchmarking the outdoor industry’s sustainability efforts U.S. Paper and Wood Products Manufacturers Report Sustainability Progress And now, specific companies in the news: Headlines of interest: Papa John's adopts 'poison pill' to limit founder John Schnatter's stake Mcdonald's Salads Tainted By Parasite Have Now Sickened 163 People In 10 States 'Made in America': Lockheed Martin adds jobs to boost F-35 production Jamie Dimon on the trade war, infrastructure 'emergency' and Trump Harley-Davidson expects tariffs will cost it $45 million to $55 million this year 10 years after crisis, Fannie, Freddie trigger new alarms about growing role News & Opinion: Asset Managers, Sovereign Wealth Funds, Pension Funds Climate-risk plan for sovereign funds Walters: Pension fund earnings keep rising — so why still crushing debts' | G&A Institute Sustainability Update™ Sustainability & ESG Trends in View -– The G&A Institute Team Closely Monitors Developments For You ________________________________________ _________________________________________ Louis Coppola from G&A Institute Goes In Depth on How to Improve ESG Performance _________________________________________ G&A's To The Point! is a businesss intelligence web-platform resource. This management briefing service offers timely insights and perspectives on Corporate Sustainability, Responsibility & Citizenship.Click here to request a trial subscription. Below are links to a sampling of three recent briefs: ABOUT THOSE CORPORATE EMPLOYEE PENSION PLANS –The Focus is Increasing on the Shortfalls…and Remedies _________________________________________ FLASH REPORT: 85% of S&P 500 Index® Companies Publish Sustainability Reports in 2017 Using The GRI Sustainability Reporting Framework Improves The Quality of ESG Disclosures - Joint Research From G&A Institute and Baruch College Shows
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