SASB Chapter 5 Vocab Flashcards
Data Aggregators
compile and present data, making it possible for investors to
access data from a variety of companies in one place rather than sourcing data directly from individual companies. Each Aggregator has proprietary methodologies for sourcing and organizing data, as well as solutions offered to support performance analysis. Aggregators tend to focus on two types of data;
Structured Data
Largely quantitative, such as stock values and water-use quantities,
and can be clearly organized in a relational database, thus enabling easy analysis. Aggregators focused on structured data source publicly available company and market data, and make it available to users on a common platform.
Unstructured Data
Tends to be text heavy. In the context of ESG information,
unstructured data often includes text files, news articles, call transcripts, reports, or other information cannot easily be stored in a relational database and can therefore be much harder to analyze. Historically, a significant portion of sustainability reporting, if
not most of it, has been narrative or unstructured. Unstructured data aggregators often provide information from sources other than company-reported information.
ESG Ratings and Analytics Providers
Also influence the supply and demand of
sustainability information. Unlike data aggregators, which primarily provide underlying data to clients, rating agencies each employ a unique methodology for scoring or ranking individual companies based on comparative ESG assessments. ESG Scores
and rankings can provide a simpler way for investors to assess companies than developing in-house methodologies to analyze the underlying data from aggregators.
Software Providers and Disclosure Platforms:
enable companies to collect and report information. Software providers also help standard setters build taxonomies and information validation pathways.
Sell-side Analysts
Those who work for investment brokerage firms, analyzes
companies, or make buy, sell or hold recommendations on stocks or other securities - can play a significant role in investor decision making.
Securities Exchanges
Around the world increasingly encourage listed companies to
report non-financial and sustainability information. Not to be confused with securities commissions (which serve as securities regulators and have the authority to legally mandate sustainability disclosure from public companies), securities exchanges are
often publicly listed companies themselves and set terms that companies must adhere to in order to maintain listed status.
Coalitions
A group of individuals and/or organizations with a common interest who agree to work together toward a common goal.
Alliance Organizations
A collaboration between two companies in which each individual company is expected to profit or benefit from the agreement.
The ESG market is also influenced by a number of prominent coalitions and alliance organizations shaping corporate and investor behavior.
CDP (Carbon Disclosure Project)
Supports companies, cities, states, and regions in measuring and managing environmental risks and opportunities, including those related to climate change, water security, forestry management, and other issues. Companies and cities that voluntarily
disclosure to CDP often do so at the behest of investors, major buyers, and other stakeholders. CDP collects data through an annual survey and then scores companies and cities on a report-card-like scale ranging from A to F, where an A represents environmental leadership, a D- represents low environmental awareness and an F
indicate a failure to report sufficient information. Due to its broad uptake, the survey functions as a de facto disclosure standard for environmental information. CDP also provides the global secretariat for the Climate Disclosure Standards Board and Science
Based Target Initiative
Climate Disclosure Standards Board (CDSB)
CDSB offers companies a framework
for reporting environmental information with the same rigor as is used to report financial information. The CDSB Framework for Reporting Environmental and ClimateChange Information (CDSB Framework) encourages standardization of environmental
reporting processes and helps investors, analysts, companies, regulators, stock exchanges, and accounting firms consider the impacts of natural capital on corporate performance alongside financial capital. The CDSB Framework sets forth a series of
principles by which reporting companies should abide when disclosing environmental information in mainstream reports.
Global Reporting Initiative (GRI)
As an independent standard-setting organization,
GRI helps companies and other organizations report significant impacts on the economy, environment, and surrounding society, including impacts on human rights. In
addition to sustainability standards identifying specific information and metrics to be disclosed, GRI offers a set of reporting principles that define report content and set expectations for quality. GRI Standards are topic specific and are used to report
material economic, environmental, or social topics to a range of stakeholders, including civil society, consumers, employees, investors, and policy makers.
International Integrated Reporting Council (IIRC)
IIRC issues International <IR> framework (<IR> Framework). The <IR> Framework helps companies connect sustainability disclosure to reporting on financial and other capitals using a set of guiding principles for report preparation and connected content
elements. Specifically, IIRC recognizes six capitals - financial, manufactured, intellectual, human, social and relationship and natural - and aims to support companies in understanding and communicating the interdependencies of these capitals through a cycle of integrated thinking and reporting.</IR></IR></IR>
SASB
SASB, also an independent
standard-setting organization, provides sustainability disclosure standards that enable businesses around the world to identify, manage, and communicate financially material
sustainability information to investors. SASB Standards cover those environmental, social, and governance topics most likely to be financially material to companies in a given industry and reasonably likely to affect their financial condition or operating performance.
TCFD
The TCFD offers a
principles-based framework for climate-related financial disclosure used by companies to provide information to investors, lenders, insurers, and other stakeholders. The TCFD offers a set of recommendations for companies to address climate risk in financial filings or other reports by disclosing information related to governance, strategy, risk management, and metrics and targets, with a strong focus on risks and opportunities related too the transition to a low carbon economy.
