ESG Professionals Network

Here’s news from “ESG Today”: "The European Financial Reporting Advisory Group (EFRAG) announced the release of its voluntary sustainability reporting standard for non-listed SMEs (VSME), aimed at enabling small companies to report on ESG issues in a simplified and consistent way. EFRAG was mandated by the European Commission to develop sustainability reporting standards for the CSRD, as well as voluntary standards for non-listed SMEs, who do not fall under the scope of the CSRD, but who nevertheless increasingly face growing demands for sustainability-related information from large companies and banks. #EFRAG said that the VSME was designed to “replace the current multiple and uncoordinated questionnaires and ESG data requests” facing these companies." #esg #climate https://lnkd.in/eN3__8tb

Here’s news from “ESG Today”: "The California Air Resources Board (CARB), the regulator charged with developing and enforcing new regulations requiring large companies to disclose their value chain emissions and report on climate-related financial risks, announced that it will ease emissions reporting requirements and not pursue enforcement action in the first year of reporting, in order to give companies more time to prepare, as long as they show good-faith efforts to comply with the new rules. Applying to companies with revenues greater than $1 billion that do business in California, the new regulation effectively introduces climate reporting obligations for most large businesses in the U.S., starting with Scope 1 and 2 emissions in 2026, and Scope 3 the following year. #esg #climate https://lnkd.in/eyBBgeth

– Free ESG rating scores might mean they are valued at zero. – The psychology is that people value something based on how much they pay for it. #esg #climate https://lnkd.in/gDttcQJD

So we’ve written a few blogs about starting small for those that don’t have the budget – or who aren’t quite sure how to get started with this ESG reporting stuff. I’ve heard a lot of anecdotes about companies who had stories to tell, but didn’t realize that they indeed had those. They hadn’t captured all that “good” information. They hadn’t searched for it or didn’t realize it would count towards an ESG rating. See this “Bank Director” article for example. Nice tales to hear. But where the “rubber meets the road” is what do you do next? So far, you’ve just reported out about activities that you already have been undertaking. The big questions are: What is your ESG strategy? How is that strategy woven into your overall business strategy? How does implementation of all that look like? And how will you report out your success – and failures – as you go? This is where it all gets serious about ESG and not just what some might see is akin to window-dressing… #climate #esg https://lnkd.in/ewFVCHP9

Here’s an excerpt of this note from Harald Walkate: "You might have noticed through my posts that when it comes to understanding climate investment risk, I’m a fan of scenario analysis. People often ask “how does it work?” They assume this requires expensive consultants and 200p reports. And maybe crystal balls. Not at all: the best way to do scenario analysis is to listen to podcasts like this one from the Economist. They make you understand that the role of government is central to this issue (Greta Thunberg is right)." https://lnkd.in/ec6Cazbk

Here’s the intro from this Tim Mohin newsletter: "On Monday, COP16 – the United Nations Biodiversity Conference of the Parties (COP) to the UN Convention on Biological Diversity – kicked off in Cali, Colombia. Despite previous UN meetings on biodiversity being the realm of NGOs, activists, and governments, companies are now flooding in – this year’s event is expected to have more than 1,000 private-sector participants, and ‘nature positive’ goals are moving up the corporate agenda. The new term of art is “Nature Positive” – defined as limiting and reversing biodiversity loss, with a goal of increasing nature by 2030. However, with so many companies brandishing the term around, some wonder if it is becoming a buzzword and if biodiversity is the next area ripe for greenwashing. The Taskforce on Nature-related Financial Disclosures (TNFD) had a series of announcements at COP16, including that they were nearing 500 members. CDP also made an announcement that the number of companies making biodiversity data disclosures has increased by 43% since COP15 (2022). However, more guidance is needed for companies on how they can help preserve nature, which was one of the goals of this COP. The World Business Council for Sustainable Development announced plans at COP16 to meet this need for more guidance and harmonize nature-related metrics used by corporations to help them track progress toward the nature-positive goal. These guidelines will be released in 2025 at COP30 (the climate COP) in Brazil." #esg #climate https://lnkd.in/gW27T6xb

Here’s an excerpt with a list of links from this note by Sean Lyons about who is in charge globally of things that impact climate #esg #climate https://lnkd.in/eZ6uSf8z

Here is a report from KPMG that includes statistics for the S&P 500 and Russell 3000 about board diversity disclosure as of the middle of 2024. The stats include: Board gender diversity: – 99% of the S&P 500 and 88% of the R3000 disclose board gender composition – 53% of the S&P 500 and 25% of the R3000 disclose gender by individual director names – 92% of the S&P 500 and 82% of the R3000 disclose the number or percentage of directors identifying as gender-diverse Board racial/ethnic diversity: – 98% of the S&P 500 and 85% of the R3000 disclose board’s racial/ethnic diversity – 43% of the S&P 500 and 20% of the R3000 disclose race/ethnicity by individual director names – 45% of the S&P 500 and 57% of the R3000 disclose the number/percentage of directors identifying with specific racial/ethnic categories – 74% of the S&P 500 and 39% of the R3000 disclose the number/percentage of racially/ethnically diverse directors on the board #dei #boarddiversity #esg https://lnkd.in/eJXCeThz

Here’s a note from Nawar Alsaadi, FSA, SIPC: "BlackRock has pulled back on talking about sustainable investing and reduced its support for ESG resolutions, but this hasn’t stopped money flows into BlackRock sustainable strategies, which have exceeded $1 trillion in assets this year. As a matter of fact, the growth rate in money flows for BlackRock sustainable strategies is on par with last year and is the fastest growth since 2019 (except for 19/20). These numbers put in context the issue of the anti-ESG backlash, and to what extend sustainable investment strategies have become core to the business models of asset managers. As to why money is flowing into such strategies, for starters, according to Morgan Stanley, over the past five years, sustainable funds have achieved a median performance of 4.7% more than traditional funds with outperformance accelerating since December 2022. 54% of individual investors plan to increase their allocation to sustainable investment strategies. Meanwhile, the percentage of asset owners allocating over 50% of their investments to strategies with ESG considerations has increased from 29% in 2022 to 35% in 2024. Despite these large numbers, 5, 10 and 15 years from now, these numbers will be much larger. This is because the sustainable transition is an existential inevitability. 80% of the people globally want stronger climate action. And global sustainability laws, policies, and regulations continue to grow unabated. The combination of growing sustainability policy and regulations along with strong societal support are fundamentally changing the way companies do business." #esg #climate #blackrock https://lnkd.in/e9gjwdKU

Ceres has issued this 13-pages of guidance about how directors can participate in stakeholder engagement about climate issues. Here’s the press release. The appendix includes three pages of questions that investors might ask directors. For example, here are four questions that could be asked about climate lobbying: 1. How does your board oversee the company’s direct and indirect lobbying activities? 2. How does your board review the company’s lobbying activities (direct or indirect through industry associations and similar collaborations) and their consistency with the Paris Agreement or the company’s public statements (including targets and goals) concerning climate-related issues? 3. If not already done, would your board consider encouraging the company’s senior management team to establish forward-looking climate-related public policy priorities that would align with and support the company’s ability to meet its GHG emission reduction targets or other climate-related goals? 4. If not already done, would your board encourage the company’s senior management team to privately share the results of a third-party independent assessment of the company’s climate policy influence activities and the alignment of such activities with the company’s own climate-related commitments and policy priorities, as other public companies have done? #esg #climate https://lnkd.in/eWP8xBV9