Chapter 5 Flashcards
What are the 8 elements in the Sustainability Disclosure Value Chain?
Reporters, Disclosure Platforms & s/w, Auditors, Frameworks & Standards, Data Providers, Analytics Platforms, End Users, Regulators
What evidence is there that the ecosystem for sustainability disclosure is maturing?
- More orgs in ecosystem
* Products / services are more specialized
How does SASB explain confusion around “alphabet soup” of information, e.g. Data Quality skepticism?
- Though maturing, sustainability space is immature compared to traditional finance
- In susty, orgs that provide disclosure guidance are confused with orgs that rely on disclosure – esp ratings agencies and analytics platforms
- specifically 3 types of orgs influence supply/demand of quality data:
- issue disclosureguidance (SASB)
- aggregate data
- create ratings or analytics
*
What are the three positive effects on data that disclosure guidance orgs create (that improves the quality of services by both data and ratings providers)?
Comparable, consistent, reliable
How do aggregators decide on which structured data to include and source that information?
Each aggregator determines separately based on availability of information and what’s demanded by customers (investors).
Sometimes data is sourced from companies via voluntary surveys or data requests; comparative / benchmarks.
Sometimes data is constructed by doing modeling (benchmark per headcount, calculated for a new company based on their headcount)
Name the survey-based data aggregators SASB mentioned
B Analytics, CDP, Global Real Estate Sustainability Benchmark, S&P SAM Corporate Sustainability Assessment (CSA)
Name the survey-based structured data aggregators SASB mentioned.
B Analytics, CDP, Global Real Estate Sustainability Benchmark, S&P SAM Corporate Sustainability Assessment (CSA)
What is S&P SAM CSA?
Standard and Poor’s [SAM] Corporate Sustainability Assessment
What is UNSDG?
United Nations’ Sustainable Development Goals
What is CDP?
Carbon Disclosure Project
Name the two unstructured data aggregators SASB mentioned.
RepRisk, Truvalue Labs
How is unstructured data aggregated?
Qualitative data such as documents, articles
Differentiate between ESG ratings and analytics providers v. Data aggregators
Aggregators provide data; ratings agencies provide scoring and ranking.
How often does SASB say ratings are updated
Annually
Name the ESG ratings providers SASB mentions.
ISS ESG, MSCI, Sustainalytics, Vigeo Eiris
What is ISS?
Institutional Shareholder Services
How do the three major categories on the value chain get confused?
Ratings orgs offer access to data along with the scores/ratings, including company reported data.
There are also examples where a survey-based data aggregator provides disclosure guidance, such as CDP, which oversees the Carbon Disclosure Standards Board (CDSB).
What does ESG expect to happen as investors gets more mature, integrated?
Look to global ratings and analytics providers to provide access to the underlying data
Investment firms can develop their own ESG scoring models rather than rely solely on a rating/analytics provider’s analysis.
Perhaps evaluate against ratings’ firms benchmark
Differentiate data aggregators / ratings companies v. guidance providers (e.g. HIP vs SASB)
the former tend to be for-profit, the latter non-profit
the latter use public commentary including from companies, investors and the rest of the ecosystem; the former use market feedback.
the latter tend to have highly transparent process and results
the latter balances the needs of information providers with users; the former can make bespoke innovations
What does SASB expect to happen as investors get more mature and integrated?
Look to global ratings and analytics providers to provide access to the underlying data
Investment firms can develop their own ESG scoring models rather than rely solely on a ratings/analytics provider’s analysis
Perhapve evaluate against ratings’ firms benchmark
Who are the influencers of Data Quality?
Disclosure platforms enable companies to collect;
Sell-side analysts;
Securities exchg;
coalitions and alliance organizations;
industry associations;
other NGOs
What are the 3 areas of scope that differentiate different standards orgs? “comprehensive corp reporting”
Already reflected in financial accounts;
Material for enterprise value creation;
Organization’s significant impacts on the economy, enviornment, and people.
What are the six most commonly used disclosure frameworks and standards?
CDP, CDSB, GRI, IIRC, SASB, TCFD
Of the “6 common…” which are frameworks and which are standards?
Frameworks: CDSB, IIRC, TCFD
Standards: CDP, GRI, SASB
