The ABCs of ESG: Initiatives and Organisations Issuers Should Understand

Business Roundtable

• In existence since 1978, but received new focus in 2019 with release of new “Statement of Purpose of a Corporation”
• Statement is signed by 181 CEOs “who commit to lead their companies for the benefit of all stakeholders – customers, employees, suppliers, communities and shareholders.”

CERES

• Ceres is a sustainability nonprofit organization comprised of investors, public interest groups and companies that advocates to build sustainability leadership and take on challenges like climate change, deforestation, water scarcity and human rights abuses.

Climate Action 100+

• Climate Action 100+ was formed in the wake of the 2015 Paris Agreement, a global accord signed by nearly 200 countries (and ratified by 170), aiming to keep the increase in global average temperatures to well below two degrees Celsius above pre-industrial levels, and pursuing efforts to limit warming further to 1.5 degrees Celsius. 
• Designed by investors for investors, the initiative aims to ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change.
• Investor signatories engage with the companies in which they invest, to secure greater disclosure of climate change risks and robust company emissions reduction strategies

FASB – Financial Accounting Standards Board

• The Financial Accounting Standards Board (FASB) is an independent, private-sector, not-for-profit organization that establishes financial accounting and reporting standards for public and private companies and not-for-profit organizations under Generally Accepted Accounting Principles (GAAP). It was established in 1973.
• In March 2021 FASB staff published a white paper discussing the intersection of ESG matters with financial accounting standards

HCMC – Human Capital Management Coalition

• Diverse group of 32 institutional investors, representing $6T in assets, to elevate HCM as a critical component of company performance
• Coalition engages with companies to understand and improve how HCM contributes to long-term shareholder value
• HCMC is co-chaired by UAW Retiree Medical Benefits Trust and the California State Teachers' Retirement System

IASB – International Accounting Standards Board

• The International Accounting Standards Board (IASB) is an independent, private-sector organization that develops and approves International Financial Reporting Standards (IFRSs). The IASB operates under the oversight of the IFRS Foundation. The IASB was formed in 2001 to replace the International Accounting Standards Committee (IASC), which was formed in 1973 by accounting bodies in Australia, Canada, France, Germany, Japan, Mexico, Netherlands, United Kingdom/Ireland and the United States.

ICCR – Interfaith Center on Corporate Responsibility

• The Interfaith Center on Corporate Responsibility (ICCR) uses shareholder advocacy to press companies on environmental, social, and governance issues. It has a coalition of 300 global institutional investors, representing over $400 billion in managed assets. Leveraging their equity ownership in some of the world's largest and most powerful companies, ICCR members engage management to identify and mitigate social and environmental risks resulting from corporate operations and policies. The ICCR is in its 47th year.

ICGN – International Corporate Governance Network

• International Corporate Governance Network's mission is to promote effective standards of corporate governance and investor stewardship to advance efficient markets and sustainable economies worldwide. Our policy positions are guided by the ICGN Global Governance Principles and Global Stewardship Principles, which are implemented by:

• Influencing policy by providing a reliable source of investor opinion on governance and stewardship;
• Connecting peers at global events to enhance dialogue between companies and investors around long-term value creation; and
• Informing dialogue through education to enhance the professionalism of governance and stewardship practices.

IFRS – International Financial Reporting Standards

• The IFRS Foundation is a not-for-profit international organization that develops a set of global accounting standards, known as IFRS Standards.
• IFRS works to promote transparency, accountability and efficiency in financial markets by fostering trust, growth and long-term stability in the global economy.
• In December 2020 published Consultation Paper which sets out possible ways the IFRS Foundation might contribute to the development of global sustainability standards by broadening beyond the development of financial reporting standards and using experience in international standard-setting

IIGCC – Institutional Investors Group on Climate Change

• The Institutional Investors Group on Climate Change (IIGCC) is a forum that enables investors to collaborate on climate change, with a focus on public policies, investment practices and corporate behavior.
• IIGCC's mission is to mobilize capital for a low carbon future using investors' voices and collaboration with businesses, policymakers and investors.
• Members consider it a fiduciary duty to minimize long-term risks and losses and present and consider opportunities associated with climate change.

IIRC – International Integrated Reporting Council

• See “Value Reporting Foundation” (merger of SASB and IIRC)
• IIRC will merge with SASB in mid-2021
• The International Integrated Reporting Council (IIRC) is a global coalition of regulators, investors, companies, standard setters, the accounting profession and NGOs. It promotes value creation as the next step in the evolution of corporate reporting, with a goal of establishing reporting and mainstream thinking and business practices in both the public and private sectors.

IOPA – Investors for Opioid and Pharmaceutical Accountability)

• The IOPA consists of 54 investors with over $3.5 trillion in assets under management and is co-led by Mercy Investment Services, Inc. and the UAW Retiree Medical Benefits Trust
• IOPA’s corporate focus is on adopting or strengthening corporate governance practices that improve board independence, accountability and oversight related to opioid risks, use shareholder resolutions

IPCC – The Intergovernmental Panel on Climate Change

• The IPCC is the United Nations' body for assessing the science related to climate change.

ISG – The Investor Stewardship Group

• The ISG is an investor-led group with more than 60 institutional investor members, including BlackRock, State Street and Vanguard, that articulates a framework of six stewardship principles intended to establish investor expectations around corporate governance practices of U.S. publicly listed companies.

ISO – International Organization for Standardization

• ISO is an independent, non-governmental international organization with a membership of 164 national standards bodies.
• Through its members, it brings together experts to share knowledge and develop voluntary, consensus-based, market relevant International Standards that support innovation and provide solutions to global challenges.

PRI – Principles for Responsible Investing (sometimes UN PRI)

• The UN PRI is a supports responsible investment worldwide, encouraging investors to use responsible investing to enhance returns and manage risks. This investor-sponsored initiative has over 2,200 signatories, including all major institutional investors, and it was created in partnership with the UNEP Finance Initiative and the UN Global Compact.
• PRI articulates six investment principles related to the incorporation of ESG issues into investment practice, and examines the investment implications of ESG factors. It supports its signatories by helping investors incorporate these considerations into investment and ownership decisions.
• While the PRI engages with global policymakers, it is not associated with any government. It is supported by, but not part of, the United Nations.

SBTi – Science Based Targets initiative

• SBTi “mobilizes the private sector to take the lead on urgent climate action.”
• The Science Based Targets initiative (SBTi):

• Defines and promotes best practice in emissions reductions and net-zero targets in line with climate science.
• Provides technical assistance and expert resources to companies who set science-based targets in line with the latest climate science.
• Brings together a team of experts to provide companies with independent assessment and validation of targets.
• The SBTi is the lead partner of the Business Ambition for 1.5°C campaign – an urgent call to action from a global coalition of UN agencies, business and industry leaders, mobilizing companies to set net-zero science-based targets in line with a 1.5°C future.

SDGs – Sustainable Development Goals

• The Sustainable Development Goals (SDGs), sometimes referred to as Global Goals, are a call to end poverty, protect the planet and ensure all people enjoy peace and prosperity.
• Seventeen Goals were established by the UN, building on the Millennium Development Goals while expanding to include climate change, economic inequality, innovation, sustainable consumption, peace and justice and other priotities. The goals are seen as interconnected, and are intended to inform investors' engagement with companies on ESG matters and to focus ESG research firms on certain areas.
• Some companies use the SDGs as a framework to guide ESG disclosures.
• The PRI has committed to aligning its investment principles with the SDGs.

UNEP FI – United Nations Environment Programme Finance Initiative

• The United Nations Environment Programme Finance Initiative (UNEP FI) is global partnership established between the United Nations Environment Program and the financial sector.
• The organization promotes sustainable finance with a special focus on climate change. Its motto is "Changing finance, financing change."
• As of June 2019, over 200 institutions have signed the UNEP FI Statement and committed to working towards the organization's goals.

UN Global Compact – United Nations Global Compact

• The UN Global Compact launched in 2000, the United Nations Global Compact as a policy platform and a practical framework for companies committed to sustainability and responsible business practices.
• It has 7,000 corporate signatories in 135 countries, make it the largest voluntary corporate sustainability initiative in the world.

US SIF – U.S. Sustainable Investment Forum

• The US SIF Foundation is a "Forum for Sustainable and Responsible Investment." It is a 501(C)(3) organization that advances its mission with education, research and programs, including training for advisors and other financial professionals on the Fundamentals of Sustainable and Impact Investment.

Value Reporting Foundation

• Merger of International Integrated Reporting Council (IIRC) and the Sustainability Accounting Standards Board (SASB), announced November 2020
• Expected to launch in mid-2021
• Will create a credible, international organization that maintains the Integrated Reporting Framework, advocates integrated thinking, and sets sustainability disclosure standards for enterprise value creation.
• The merger directly responds to calls from global investors and corporates to simplify the corporate reporting landscape, providing the market with a clear solution for communicating about the drivers of enterprise value.

World Economic Forum

• Founded in 1971, The World Economic Forum is the International Organization for Public-Private Cooperation.
• At the 2020 Annual Meeting in Davos, 120 of the world’s largest companies supported efforts to develop a core set of common metrics and disclosures on non-financial factors for their investors and other stakeholders.
• This project, developed within the International Business Council, a community of over 120 global CEOs, seeks to improve the ways that companies measure and demonstrate their contributions towards creating more prosperous, fulfilled societies and a more sustainable relationship with our planet.