Be ready to disclose more when it comes to ESG

Falling short of benchmarks
Index Industry Association

At the end of July, the Index Industry Association (IIA) Global Survey reported dramatic ESG growth across asset classes. Of 300 investment management firms in the US and Europe, 76% of managers currently implement ESG within fixed income, up from 42% in 2021. That exceeds the 74% of firms that incorporate ESG in equities, up from 53% in 2021. 

But it’s been noted that a majority of FTSE 100 constituents are not following through on climate-related disclosures, despite making net zero pledges. Insig AI report that 70% of companies in the UK large-cap benchmark failed to meet stakeholder expectations on climate-related disclosures between 2015 and 2021. 

The necessity for companies to report on climate, and ESG more broadly, is of increasing importance as pressure mounts on investors from their sustainably-focused clients.

Global finance regulations are toughening up

In the U.S, the SEC (Securities and Exchange Commission) is proposing greater corporate disclosures related to climate and scope 1, 2, and 3 emissions. In Europe, negotiations for the EU Green Bond Standard continue. The opportunity for investors being caught out for greenwashing will only increase, as will the number of penalties issued. 

Though we are a long way from global consensus, there are continued calls for regulation as ESG data is increasingly being integrated into global investment decisions. It’s clear that both investors and companies need to keep a close eye on this evolving landscape, preparing to provide hard evidence on all ESG activities. 

Asset managers can’t wait

Corporations are boldly pledging to major reductions in their carbon footprint and overall environmental impact at global conferences, such as COP26. But until comparable and interoperable taxonomies are decided and globally consistent standards are made mandatory, asset managers must play an active part in advancing us to a more sustainable world. 

SI Engage: cohesion, clarity and transparency

SI Engage enables fund managers to create engagements with minimal clicks, insert data in a variety formats, and record and disperse information in seconds. Internal teams (stewardship, governance and beyond) can contribute in the same way, and importantly access the high-quality insights they need with ease, for greater impact and success. Complex data becomes meaningful insights, with internal and external reports quick and simple to generate and customise.

SI Engage makes it easy for organisations to share their current and future ESG performance, position, and intent. 

To find out more or to book a demo, get in touch.

Image credit to Vecteezy.com.

 

Sign up for weekly insights, including SI Engage and industry news

Top