ESG Unlocked: Europe out in front - Page 11

Sponsored by

Navigating the maze of ESG reporting standards and data sources

Reliable ESG data sources can be tough to find
Author : FlexShares

Investors face a challenge when looking for sustainable investing strategies . There is no one global standard for ESG data . Companies can follow several different reporting frameworks to provide details on their ESG-related risks , and multiple data providers offer their own way of analysing those disclosures to assess a company ’ s sustainability .

That is why it is critical for investors to look closely at the methodology asset managers use to construct sustainable investing portfolios . FlexShares ETFs is part of Northern Trust Asset Management , which has seen how the
ESG reporting and data landscape has evolved over the 30 years we have been managing sustainable investing strategies . Based on that experience , we believe investors should focus on these relevant and financially material considerations when assessing how well a strategy ’ s methodology evaluates sustainability risks and opportunities .
Leading disclosure frameworks for risk assessment
There are key differences among the reporting frameworks that companies use to measure and disclose their ESG- related risks and impacts . Some do not cover all three pillars of environmental , social and governance . Others provide universal guidelines that apply to all companies and are aimed at a broader base of potential stakeholders , including regulators and customers .
We believe investors should focus on the specific sustainability issues most likely to affect a company ’ s financial or operating performance . For that information , the Sustainable Account Standards Board ( SASB ) standards provide a proven , reliable framework .
Standards that enable comparisons across industries
SASB has produced the most thorough assessment of industry-specific material ESG issues . This approach is critical because the risks that are most important to an energy company , for example , can differ significantly from the risks that are most important to a retail or technology company .
ESG Unlocked : Sustainable Revolution In Full Swing October 2022
ESG Unlocked : Europe out in Front October 2022