ESG: What is it and Why do we Care? (Part – V)


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Sustainability Accounting Standards Board (SASB)

Focus: US public companies only. Industry-specific issues deemed material to investors.

SASB’s standards enable comparison of peer performance and benchmarking within an industry. Studies by Goldman Sachs and Deutsche Bank have shown the stock of companies who disclose on sustainability outperforms that of companies who do not.

SASB is backed by the likes of Bloomberg LP and Rockefeller Foundation, giving it extra clout with capital markets.

Carbon Disclosure Project (CDP)

Focus: Primarily GHG emissions but has grown to address water and forestry issues as well.

CDP holds the largest repository of corporate GHG emission and energy use data in the world and is backed by nearly 800 institutional investors representing more than $90 trillion in assets.
Its transparent scoring methodology helps respondents understand exactly what’s expected of them. CDP was regarded as the world’s most credible sustainability rating in 2013.

Global Real Estate Sustainability Benchmark (GRESB)

Focus: Environmental, Social and Governance performance in the global commercial real estate sector only. Includes asset and entity-level disclosures.

Private and public institutional investors look to GRESB’s annual survey as the barometer of sustainability performance in the commercial real estate industry. Its niche target audience allows it to give deeper and more accurate insights into industry performance and reveal “investment grade” results.

Materiality Assessment

Materiality is an important cornerstone of an effective sustainability strategy and one of the most important pillars of SASB and GRI disclosure frameworks. Determining the materiality of sustainability issues is a key step in the identification of risks and available opportunities to be addressed by the organization.

Materiality Assessment

Assessment of material issues helps corporate leaders to develop a sound and actionable ESG strategy that maximizes returns. The focus helps in concentrating the company’s resources, tactics, training, and team-building in alignment with the issues that matter the most.

Without an effective materiality assessment process (and mapping) leaders waste time, resources and money on issues that not only provide little or no benefit in sustainability reporting but also confuse the company’s stakeholders’ analysis.

How to determine which issues are material for the company?

Materiality assessment is situation and party specific.  What is important to the individual stakeholder or group of stakeholders may vary from the company’s internal view of materiality regarding issues that matter to each party.

GRI Gap Analysis

GRI gap analysis is the first step in the strategic planning for compliance with GRI standards, globally accepted reporting framework. The fragmented nature of public disclosure often results in information being scattered across various reports (such as Website, annual reports, 10K, 10Q, Policy Statements, Sustainability report etc.).

Gap analysis identifies which required information is currently unavailable and needs to be acquired as per the accordance requirement. Currently, “in accordance with Core” GRI report requires organizations to report on 34 General Disclosures and one indicator from each aspect that the organization identifies as material to the business. “In accordance with Comprehensive” GRI report requires organizations to report on all 58 General Standard Disclosures and every indicator from each material aspect.


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