TheCorporateCounsel.net

With the SEC continuing to signal that it will likely propose climate disclosure rules in the near future for US public companies, this is an interesting announcement:

A global alliance of leading financial institutions, investors and companies today aims to shape the future of ESG data in the ESG Book, a new central source of accessible and digital corporate sustainability information.

Developed by Arabesque, the ESG Book, which supports the 10 principles of the United Nations Global Compact, makes sustainability data more widely available, makes it comparable to all stakeholders, and allows businesses to create their own data through a digital platform. Allows you to become an administrator and provides a framework-neutral ESG. Provides real-time information and promotes transparency.

The ESG Book is available to all businesses, investors, standards setters, and other stakeholders and follows five principles based on its mission to create ESG data as a public good.

So, companies can submit the info that investors want to a publicly accessible, centralized platform – through which investors can analyze comparable data points? Arabesque’s president told Reuters that he aims for this platform to be the “Spotify of ESG,” but it sure sounds closer to Edgar. That said, the release identifies the founding group of supporters as including:

The World Bank’s International Financial Corporation, UNCTAD, Global Reporting Initiative, Bridgewater Associates, Swiss Re, HSBC, Deutsche Bank, HKEX, Allianz, Glass Lewis, Cardano Development, QUICK, Bank Islam, Goldbeck, Werte Stiftung, WBCSD, Climate Leadership Coalition, Climate Governance Initiative, Climate Policy Initiative, Climate Bonds Initiative, Responsible Jewelery Council, GeSI, and Arabesque.

In other words, none of the biggest asset managers have joined by name – yet – and the focus appears to be more Europe and emerging markets-based. (However, Bloomberg reported a couple of months ago that US investors are banding together on their own private project.)

It remains to be seen what level of participation this will garner on the corporate side, particularly in the US, and how it could change disclosure practices. The platform automatically maps data points to various established reporting frameworks – e.g., GRI, TCFD, SASB, and possibly others – so you only have to enter it once. You can also add info in “real time” outside of the annual reporting cycle (just like you can post your sustainability report and other voluntary info to your website at any time). This would all be subject to the liabilities that attach to voluntary disclosures rather than SEC filings.

Adding your sustainability disclosures to the cloud-based ESG library would probably make it easier for investors to find the data they’re interested in and track progress, right alongside info from other companies. But isn’t that what Exchange Act reporting is for?

– Liz Dunshee