Despite being a growing reservoir of funds under management, this critically important pool of capital is confronting mounting problems collating and disseminating key data in a timely manner.
The ratings house is pinning its growth strategy on a revamped methodology that increases the emphasis on governance to 25 per cent – a timely move considering APRA’s proposed reforms.
Link’s investor relations arm gets into ESG reporting
Orient Capital, a Link Group company focussing on information to institutional investors and to listed companies looking to better liaise with their members and shareholders, has produced a guide for clients and others: ‘Keeping Pace with ESG’. The guide is being released in both Australia and the UK today and will be available at https://orientcap.com/.
ESG is a lot more complex than most people think. Alison Owers, chief executive of Orient Capital, who oversaw the report, says: “We live in a world where, over the last decade, we have seen targeted quotas for the inclusion of women on boards. We’ve seen the ‘#metoo’ movement gain prominence, extreme weather events blamed on climate change, extinction rebellion taking over city streets, and school children protesting for change. We have to pay attention to factors that drive into the heart of corporate purpose.” E (environmental) and S (social) awareness/reporting have become just as important as the day-to-day G (governance) within the companies we work for and support.
How are you tackling it? Do you know what other companies are doing? Is it becoming a theme you cannot ignore but do not quite know how to address? How do you ensure your board are taking it seriously?
Over the past few months, we challenged our intelligence team to come up with a research piece that helps you understand the subject and gives you some ideas on how companies are tackling it. To do this, we interviewed over 100 people, from the UK, Europe and Asia Pacific.
Our findings have been wide and varied. Some companies are already on board, actively reporting on ESG and measuring its effectiveness in their company. Some just aren’t. The Australian companies we spoke to, likely against a landscape of mining and extractive industries, have been on top of this for some time. UK corporates are later adopters of clear, proactive communication on these subjects.
The contrast is loud and clear in how much companies are having to report across sectors, and how different the requirements can be from one ratings agency to another. There still lacks a ‘holy grail’ that translates ESG metrics into financial reporting standards. The metrics need to be standardised globally to support the effort required by companies to respond to the call.
Alongside our annual research in this year’s report, we are pleased to have expert views from across the investor universe and corporate world. We would like to thank everyone who took part in our research and our guest experts for their contribution.
Those experts include Irfan Patel of AXA Investment Managers, Frederik Kooij of Tribe Impact Capital, Fiona Wright of Brunswick Group and Jennifer Harrison of Societe Generale as well as David Chase Lopes of Link Group’s own DF King.
– G.B
