Chapter 5

Question 1

What are the 8 elements in the Sustainability Disclosure Value Chain?

Answer 1

Reporters, Disclosure Platforms & s/w, Auditors, Frameworks & Standards, Data Providers, Analytics Platforms, End Users, Regulators

Question 2

What evidence is there that the ecosystem for sustainability disclosure is maturing?

Answer 2

• More orgs in ecosystem

* Products / services are more specialized

Question 3

How does SASB explain confusion around “alphabet soup” of information, e.g. Data Quality skepticism?

Answer 3

• 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
  *

Question 4

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)?

Answer 4

Comparable, consistent, reliable

Question 5

How do aggregators decide on which structured data to include and source that information?

Answer 5

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)

Question 6

Name the survey-based data aggregators SASB mentioned

Answer 6

B Analytics, CDP, Global Real Estate Sustainability Benchmark, S&P SAM Corporate Sustainability Assessment (CSA)

Question 7

Name the survey-based structured data aggregators SASB mentioned.

Answer 7

B Analytics, CDP, Global Real Estate Sustainability Benchmark, S&P SAM Corporate Sustainability Assessment (CSA)

Question 8

What is S&P SAM CSA?

Answer 8

Standard and Poor’s [SAM] Corporate Sustainability Assessment

Question 9

What is UNSDG?

Answer 9

United Nations’ Sustainable Development Goals

Question 10

What is CDP?

Answer 10

Carbon Disclosure Project

Question 11

Name the two unstructured data aggregators SASB mentioned.

Answer 11

RepRisk, Truvalue Labs

Question 12

How is unstructured data aggregated?

Answer 12

Qualitative data such as documents, articles

Question 13

Differentiate between ESG ratings and analytics providers v. Data aggregators

Answer 13

Aggregators provide data; ratings agencies provide scoring and ranking.

Question 14

How often does SASB say ratings are updated

Answer 14

Annually

Question 15

Name the ESG ratings providers SASB mentions.

Answer 15

ISS ESG, MSCI, Sustainalytics, Vigeo Eiris

Question 16

What is ISS?

Answer 16

Institutional Shareholder Services

Question 17

How do the three major categories on the value chain get confused?

Answer 17

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).

Question 18

What does ESG expect to happen as investors gets more mature, integrated?

Answer 18

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

Question 19

Differentiate data aggregators / ratings companies v. guidance providers (e.g. HIP vs SASB)

Answer 19

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

Question 20

What does SASB expect to happen as investors get more mature and integrated?

Answer 20

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

Question 21

Who are the influencers of Data Quality?

Answer 21

Disclosure platforms enable companies to collect;

Sell-side analysts;

Securities exchg;

coalitions and alliance organizations;

industry associations;

other NGOs

Question 22

What are the 3 areas of scope that differentiate different standards orgs? “comprehensive corp reporting”

Answer 22

Already reflected in financial accounts;

Material for enterprise value creation;

Organization’s significant impacts on the economy, enviornment, and people.

Question 23

What are the six most commonly used disclosure frameworks and standards?

Answer 23

CDP, CDSB, GRI, IIRC, SASB, TCFD

Question 24

Of the “6 common…” which are frameworks and which are standards?

Answer 24

Frameworks: CDSB, IIRC, TCFD

Standards: CDP, GRI, SASB

Question 25

What’s the difference between a framework and a standard?

Answer 25

Standards are specific, replicable, and detailed guidance

Framework are a set of concepts and principals for how information is structured and prepared.

Question 26

Of the “6 common….” which are fully industry agnostic, which have supplements, which are specific

Answer 26

Only SASB is specific, though GRI is “emerging industry-specific”?

CDSB & IIRC are agnostic

CDP & TCFD both have industry supplements but fundamentally agnostic

Question 27

Of the “6 common….” which target all stakeholders, which target providers of capital?

Answer 27

All: CDP GRI. Providers: else.

Question 28

Of the “6 common….” what are their approaches to materiality?

Answer 28

CDP & GRI are impact based (significance)

rest are enterprise value creation

Question 29

Of the “6 common….” what do they all have in common

Answer 29

All cover short, med & lt time horizons

Question 30

Which two have public meetings in their governance models

Answer 30

SASB, GRI

Question 31

Of the “6 common….” which does not have a governance model

Answer 31

CDP

Question 32

Of the “6 common….” which only has public comment

Answer 32

TCFD