Global Investors Want More ESG Disclosure
6/23/2009
By Mike Lombardo, Senior Sustainability Analyst and Manager
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| Mike Lombardo, Senior Sustainability Analyst and Manager |
Calvert was one of the founding members of the Emerging Markets Disclosure Project (EMDP), an international coalition of investors and organizations working to improve sustainability disclosure by companies in emerging markets. The coordinating partners of the initiative include: Calvert, the International Finance Corporation (IFC), the International Working Group (IWG) of the US Social Investment Forum (SIF) and SIF. Mike Lombardo, Senior Sustainability Analyst and Manager, is the Calvert representative on the EMDP and has been involved in the project since the fall of 2007.
The first phase of the three-phase project involved a benchmark report in January of 2008 to assess the state of sustainability reporting in several emerging markets, including China, India, Taiwan, South Africa, Brazil, Korea and Russia. The study assessed 75 companies across three sectors: energy (oil and natural gas), materials (metals and mining), and telecommunications. According to the study, nearly 9 out of 10 companies (87%) offered at least some level of sustainability disclosure. South African companies emerged as the overall leaders, while Chinese companies were the laggards on sustainability disclosure. Overall, only 27% of the companies surveyed indicated that they used the Global Reporting Initiative (GRI) framework.
The second phase of the project involved a sign-on statement encouraging emerging market companies to use the GRI and to improve their overall sustainability reporting. The sign-on statement calls on companies in emerging markets to improve transparency of their management of environmental, social and corporate governance (ESG) issues. The sign-on statement has been endorsed by 28 global institutional investor signatories and 15 affiliated supporters (NGOs and research organizations).
The third, and current phase of the project, which began in May of 2008, is well underway and will run through at least the middle of 2010. This objective of this phase is corporate engagement in Brazil, India, South Korea, Russia, and South Africa to promote greater and improved sustainability disclosure. That work is being done through established country teams with a strong emphasis on working with local institutional investors and research partners in each country. Calvert is the designated country team lead for South Africa and efforts to engage South African companies are being directed by Mike Lombardo. As part of the current phase, the EMDP recently conducted a survey among asset owners and asset mangers to assess the current levels of responsible investment and a range of investment issues related to ESG.
To learn more about this survey, read the press release at the Social Investment Forum Web site.
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