3. Get to know ESG frameworks
Familiarize yourself with the different standards of ESG measurements and frameworks that are out there. Below is a brief cheat sheet on various popular frameworks and their backgrounds.
GRI was founded in 1997 and produces a global framework for sustainability reporting, which includes the Sustainability Reporting Guidelines. GRI collaborates closely with organizations that provide frameworks, systems and principles that complement their work, including the UN Global Compact (UNGC), OECD, the UN-supported PRI, International Finance Corporation (IFC), IIRC, and Carbon Disclosure Project (CDP).
Established in 2011, the Sustainability Accounting Standards Board (SASB) is an independent, private-sector standards-setting organization. The SASB develops and maintains sustainability accounting standards — for 79 industries in 11 sectors — that help public corporations disclose financially material information to investors.
UNGC is an initiative that works toward the vision of a sustainable and inclusive global economy that delivers lasting benefits to people, communities, and markets. The UNGC incorporates a transparency and accountability policy known as the Communication on Progress (COP) and the annual posting of a COP is an essential demonstration of a participant’s commitment to the UNGC and its ten principles.
CDP manages a global reporting system that collects information from companies about their climate change risks, opportunities, strategies, performance, and the way in which they consume and affect natural resources. CDP has incentivized thousands of companies and cities across the world’s largest economies to measure and disclose their greenhouse gas emissions, climate change risk, and water strategies.
ISS provides a suite of ESG solutions to enable institutional investors to develop and integrate responsible investment policies and practices into their investment decisions, to inform company engagements, and to execute upon these policies through end-to-end voting. In 2015, ISS acquired Ethix SRI Advisors and formed a strategic partnership with RepRisk, allowing ISS to further expand the ESG and Socially Responsible Investing (SRI) research it provides. ISS’s solutions also include climate change data and analytics from its recent acquisition of Climate Neutral Investments. ISS’s ISS QualityScore provides research on corporate governance on over 5,600 publicly-traded companies globally.
Founded in 1995, RobecoSAM is an investment specialist focused exclusively on Sustainability Investing. RobecoSAM products include in-house asset management, Sustainability Indices, corporate sustainability assessments, active ownership and engagement, and customized portfolio benchmarking solutions.
Launched in 1999, DJSI was the first global index to track sustainability-driven public companies based on RobecoSAM’s ESG analysis. S&P Dow Jones Indices has partnered with RobecoSAM for publication and calculation of ESG indices. Companies who are invited to participate in an annual Corporate Sustainability Assessment (CSA) for possible inclusion in the DJSI World are sent an industry-specific questionnaire covering relevant economic, environmental, and social factors. There are generally 80-120 questions in a questionnaire. DJSI World covers 100 ESG issues. An annual questionnaire is sent in early April and CSA results are announced in early September.
Established in 1992, Sustainalytics provides ESG and Corporate Governance research and ratings. Sustainalytics supports investors who incorporate ESG and corporate governance insights into their investment processes.
The Ethical Investment Research Service (EIRIS) was set up in 1983 with the help of churches and charities that had investments and who needed a research organization to help them put their principles into practice. Its products and services include the EIRIS Global Platform, which provides access to a range of tools and corporate data, including its global sustainability ratings, EIRIS Portfolio Manager (providing access to global research of companies), global screening services, news risk monitors (alerting clients to reports of legal violations, breaches of international norms, and other sustainability issues), convention watches, emergency market services, and country-specific sustainability ratings.
There is no need to go the ESG development “journey” alone.