esg integrated disclosure project

If consequential new policy is to be made, or the mandate of the SEC expanded, there should be public debate regarding the need for predicate legislative action such as was taken in the European Union. Copyright 2023 Asset International, Inc. All Rights Reserved. The Task Force on Climate-related Financial Disclosures, or TCFD, is a global organization formed to develop a set of recommended climate-related disclosures that companies and financial institutions can use to better inform investors, shareholders and the public of their climate-related financial risks. The Novata platform provides customers with a clear on-ramp for selecting ESG metrics, painless data collection and data insights and analytics tools to inform investment decisions. If you continue to use this site we will assume that you are happy with it. Producing ESG disclosures and other communications aligned with leading frameworks (e.g., GRESB, CDP, DJSI) Designing ESG performance targets and accompanying strategies and achievement plans TAG is a subsidiary of A&M, an established leader in providing global leadership and advisory services to a variety of diverse industries. It integrates SASB Standards[5] to facilitate disclosure of industry-specific financially material information by private companies. The project is led by the Alternative Credit Council-the private credit affiliate of the Alternative Investment Management Association-the . Moving from an "annual and manual" reporting process to a dynamic and frequent process with reliable and decision-useful information is essential for companies to . The SDGs are viewed as a framework for shaping and prioritizing business strategy and associated reporting. She said stakeholders must give the board "a clear steer on priorities because if we were to do the . The ESG IDP is also supported by a coalition of market stakeholders including CDP, the ESG Data Convergence Initiative and the Loan Market Association. The LMA are delighted to support such a valuable project.. Credit ratings and ESG ratings are distinct but complementary products. (go back), 6IIRC, The IIRC, available here. These new metrics help promote greater harmonization and consistency of disclosure of key ESG indicators for borrowers in private credit and syndicated loan transactions. The SEC has a longstanding reputation as a fair and neutral regulator. The tool includes a set of general, industry-agnostic questions which offer a baseline ESG assessment of the borrowers business, as well as industry-specific questions, that have been sourced from the SASB standards. The goal of harmonizing and standardizing ESG information requests is to establish a global baseline of ESG information across credit markets. While disclosure of climate-related and other ESG issues is largely a voluntary undertaking to date, that may well be changing as political and other pressures cause securities regulators, particularly in Europe, to shift to more prescriptive measures. The template is the creation of the ESG IDP, an industry initiative bringing together leading lenders in the private and syndicated credit markets to improve transparency and accountability. "ESG IDP represents an important step in addressing ESG disclosure challenges in the private credit markets," said Michael Kashani, Head of ESG Credit at Apollo Global Management and ESG IDP Chair. The ESG IDP is led by theAlternative Credit Council (ACC),the private credit affiliate of the Alternative Investment Management Association (AIMA), the Loan Syndications and Trading Association (LSTA), and the United Nations-supportedPrinciples for Responsible Investment (PRI). This point is a matter of concern to issuers, as reflected in the comment letter submitted by Uber Technologies: [W]e encourage the Commission to consider requiring that companies perform a company-specific materiality assessment to identify the ESG issues most relevant to their businesses. The G20 undertook this initiative in recognition of the growing imperative to ensure that the global financial system is resilient to emerging climate-related risk. The ESG IDP is an industry initiative led by the Alternative Credit Council, Loan Syndications and Trading Association and United Nations-supported Principles for Responsible Investment that brings together leading lenders to improve market transparency and accountability. The templates launch comes as business, associations and financial regulators increasingly seek out ways to standardize ESG and climate-related disclosure data. For example, financial market participants and advisers in Europe will have sustainability-related reporting obligations beginning March 2021. The ESG IDP module, housed in Novatas framework builder, provides a simple and intuitive way for users to collect ESG information needed to fulfill their loan and credit reporting responsibilities. This video walks through the ESG IDPs Industry-specific Methodology. Profile Advisors for LSTARich Myersrmyers@profileadvisors.com, AIMADrew NicolAssociate Director, Research and Communicationsdnicol@aima.org, PRIRojn KiadehActing Head of Pressrojin.kiadeh@unpri.org, Apollo Global ManagementJoanna RoseGlobal Head of Corporate Communicationscommunications@apollo.com, Oak Hill AdvisorsNatalie HarvardHead of Investor Relations & Partnernharvard@oakhilladvisors.com. Membership in the LSTA offers numerous benefits and opportunities. The FSB launched the TCFD later that year to develop recommendations on climate-related financial disclosures. The ESG IDP was formed to establish a global baseline for ESG disclosure across the private and broadly syndicated credit markets. The group also said the executive committee spearheading the project will review the template and make any necessary updates on an annual basis. The Carbon Disclosure Project, or CDP, was founded in 2000. A&M's Transaction Advisory Group (TAG) has an exciting opportunity to join a growing team in New York, Atlanta, Boston, Chicago, Dallas, Houston, Miami, Nashville, Los Angeles, and San Francisco. The SEC would further be charged with defining ESG metrics and specifically authorized to incorporate any internationally recognized, independent, multi-stakeholder environmental, social, and governance disclosure standards in that definition if it sees fit to do so. As ESG matters have increasingly become the focus of investors and regulators, standards of disclosure created by intergovernmental and non-governmental organizations, as well as industry participants, have gained market prominence. It currently represents 250 members that manage over US$600bn of private credit assets. The importance of debate on issues of such consequence should be a point of general agreement. Investors are increasingly recognising the need for biodiversity and nature-related data, even as still nascent information streams prove difficult to navigate. November 10, 2022 - The LSTA is thrilled to announce today's launch of the ESG Integrated Disclosure Project (ESG IDP). The climate-related risk information would also include disclosure of greenhouse gas emissions, as well as certain climate-related financial metrics in an audited financial statement. The U.S. Securities and Exchange Commission has indicated that ESG disclosure regulation will be a central focus of recently confirmed SEC Chair Gary Genslers tenure. The ESG IDP is an industry initiative led by the Alternative Credit Council, Loan Syndications and Trading Association and United Nations-supported Principles for Responsible Investment that. (go back), 4See CDP, Why disclose as a company, available here. In particular, it wants to know if investment advisers and registered funds are accurately disclosing ESG investing approaches and if they have controls in place to prevent securities laws violations regarding the disclosures. The 17 numbered SDGs outline broad global goals, such as: no poverty (Goal 1); zero hunger (Goal 2); gender equity (Goal 5); and climate action (Goal 13). We believe that the technology-enabled disclosure of the EDCI metrics within the template will provide better information for both LPs and GPs to drive improvements over time on critical issues., Radhika Mehrotra, Associate Director, Capital Markets, CDP North America, said: CDP recognizes the value of the ESG Integrated Disclosure Project (ESG IDP) and how it aims to increase the availability and comparability of material ESG disclosure for both LPs and GPs investing in the private and broadly syndicated credit markets., Gemma Lawrence-Pardew, Head of Sustainability, Director Legal, Loan Market Association, stated: Reliable and accurate ESG information is vital in order for investors to channel capital into sustainable activities and companies. (go back), 8Principles for Responsible Investment, Annual Report 2019 (2019), available here. 1.A.4 The investment manager must not, in an esg disclosure statement: a. The ACC is an affiliate of AIMA and is governed by its own board which ultimately reports to the AIMA Council. The environmental, social, and governance (ESG) disclosure landscape is evolving rapidly. Why integrating ESG into your business could be the key to its resilience Back Back Close search Trending What will it take for the Digital Rupee to be widely acceptable in India? They provide finance to mid-market corporates, SMEs, commercial and residential real estate developments, infrastructure as well the trade and receivables business. "This is a big step for the industry - and great to see Novata has moved so swiftly to incorporate ESG IDP into their platform. TheESG Integrated Disclosure Projecttemplate is intended to provide a standard format for ESG-related disclosures and to offer companies a baseline from which to develop their ESG reporting capacity. Launched in New York in 2006, the PRI has grown to more than 5,000 signatories, managing over $120 trillion AUM. Yet, as Prof. Virginia Harper Ho has observed, disclosure is widely recognized as a soft form of regulation, incentivizing changes in corporate behavior where direct regulation may be difficult to achieve or enforce. As an institution, the SEC should consider whether it would be prudent to resist the pressure from some quarters, albeit well-intentioned, to approach large-scale public policy projects with the specialized tool of securities law reporting requirements and instead move incrementally to expand requirements for financially material ESG disclosure in a substantively neutral context. This receivership has far-reaching effects on companies across many, March 10, 2023 - On March 8th, the LSTA and LMA jointly hosted their annual London conference. Before you can download the template, we're asking for a few pieces of information so we can keep you up to date on this project. Click here to access the ESG IDP template. November 8, 2022. Then-Acting Chair Allison Herren Lee announced in March that the SEC will be working toward a comprehensive ESG disclosure framework and pursuing initiatives such as offering guidance on human capital disclosure to encourage the reporting of specific metrics like workforce diversity, and considering more specific guidance or rule making on board diversity. Acting Chair Lee also appointed Satyam Khanna as senior policy advisor for climate and ESG to oversee and coordinate the SECs efforts: Having a dedicated advisor on these issues will allow us to look broadly at how they intersect with our regulatory framework across our offices and divisions. And earlier this month, Bloomberg reported that John Coates, the SECs Acting Director of the Division of Corporation Finance, indicated that new disclosure requirements would focus on three areas: diversity, equity and inclusion; climate change; and human capital management. Not long ago, ESG issues occupied a narrow niche among investment professionals and NGOs. The ESG IDP is led by the Alternative Credit Council (ACC), the private credit affiliate of the Alternative Investment Management Association (AIMA), the Loan Syndications and Trading Association (LSTA), and the United Nations-supported Principles for Responsible Investment (PRI). ESG issues affect the full spectrum of business organizations, large and small. All rights reserved. Substantively, the mission of the SEC is viewed as politically neutral. Jiri Krol, Global Head of the Alternative Credit Council, said: SMEs and mid-market businesses require a more proportionate approach to ESG disclosure than large public corporates. This conference was aimed at senior and middle management professionals working in the UK, Europe, and the US and it was an ideal opportunity to, The ESG Integrated Disclosure Project Advancing ESG Data Through Harmonization and Collaboration, LSTA/Refinitiv Mark-to-Market Pricing Data, Morningstar LSTA Leveraged Loan Index Analysis, Register for The Corporate Lawyers Guide to Credit Agreements. The template is the creation of the ESG IDP, an industry initiative bringing together leading lenders in the private and syndicated credit markets to improve transparency and accountability. Professor Rose points out that the European Union has taken a legislative approach to its far-reaching climate change regulation and disclosure: The ESG disclosure mandates that have been imposed on listed companies in the EU since 2018 are explicitly tied to the EUs substantive policy embrace of the United Nations Sustainable Development Goals. Founding partners of this new initiative include Apollo Global Management and Oak Hill Advisors who, along with the ESG IDPs Executive Committee, will now spearhead efforts to promote the adoption of the ESG IDP template across the market. We would like to express our deep gratitude to Professor . The new tool aims to offer a series of benefits to private credit market stakeholders, including improving the consistency of disclosures for investors to help identify and assess industry-specific ESG risks in their portfolios, and providing borrowers with greater certainty on the ESG indicators that are most relevant to lenders, and to focus on specific disclosures. Registered in England as a Company Limited by Guarantee, No. ACC members provide an important source of funding to the economy. What are the Principles for Responsible Investment? The idea was simple: to link environmental integrity and fiduciary duty. ESG reporting by borrowers in the private credit and syndicated loan markets has not advanced quickly enough to effectively meet growing investor and regulatory demands. In 2015, the UN General Assembly adopted 17 SDGs as part of its 2030 Agenda for Sustainable Development. It currently represents 250 members that manage over US$600bn of private credit assets. As such, there is no one set of metrics that properly covers all ESG issues for all companies. This field is for validation purposes and should be left unchanged. "The ESG IDP is an important initiative to harmonize lender requests for ESG information and identify the ESG factors that are most material to lenders, in turn enabling consistent expectations for the borrower community," said Lorraine Spradley Wilson, Chief Impact Officer and Head of ESG at Novata. The ACC is an affiliate of AIMA and is governed by its own board which ultimately reports to the AIMA Council. This post is based on a recent Paul Weiss memorandum by Mr. Bergman, Mr. Karp, Mr. Rosen,Ariel J. Deckelbaum,Jeh Charles Johnson, and Loretta E. Lynch. Some U.S. legislators have recognized that political action may be necessary to effect major change, and there is already proposed legislation. The new initiative was founded by partners including Apollo Global Management and Oak Hill Advisors, and is led by the Alternative Investment Management Associations private credit affiliate, the Alternative Credit Council (ACC), the Loan Syndications and Trading Association (LSTA), and the UN-backed Principles for Responsible Investment (PRI). Member service rating of 8.7/10. Collapse of SVB and What it Means for the Loan Market, 2023 LSTA and LMA Joint London Conference, Secondary Market Monthly: February 2023 Summary, A Perfect Storm? We are delighted to officially launch this resource harmonization is the critical next step in improving the availability of consistent, reliable ESG information and furthering the responsible growth of ESG in credit markets., Carmen Nuzzo, Head of Fixed Income at the PRI, stated: Taking the cue from the PRIs ESG Factor Map, which pointed out the substantial overlapping of many competing ESG standards and frameworks, this new template will allow private creditors to have a bigger voice during the investment process. Where can I find the ESG Integrated Disclosure Project (ESG IDP) template? It is likely, too, that the SEC will consider whether private companies should also be required to make ESG disclosure requirements. We believe that this harmonized approach will increase the availability of ESG disclosure for both LPs and GPs.. LOUIS, December 12, 2022 -- ( BUSINESS WIRE )--The Investment Consultants Sustainability Working Group - United States ("ICSWG-US") announced today that the group's steering committee has voted to. The SDGs are accompanied by a total of 169 associated targets and 232 approved indicators. The ESG IDP is an important initiative to harmonize lender requests for ESG information and identify the ESG factors that are most material to lenders, in turn enabling consistent expectations for the borrower community, said Lorraine Spradley Wilson, Chief Impact Officer and Head of ESG at Novata. The project is led by theAlternative Credit Councilthe private credit affiliate of the Alternative Investment Management Associationthe Loan Syndications and Trading Association and the United Nations-supportedPrinciples for Responsible Investment. (go back), 10Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector came into force at the end of 2019, and will apply from March 2021. For example, issuers have begun to market SDG bonds, which are bonds earmarked to raise money for projects that align with SDGs. Posted by David A. Katz and Laura A. McIntosh, Wachtell, Lipton, Rosen & Katz, on, Harvard Law School Forum on Corporate Governance, by Lucian A. Bebchuk and Roberto Tallarita (discussed on the Forum, by Lucian A. Bebchuk, Kobi Kastiel, and Roberto Tallarita (discussed on the Forum, by Alan Ferrell, Hao Liang, and Luc Renneboog (discussed on the Forum, by Leo E. Strine, Jr. (discussed on the Forum, The Illusory Promise of Stakeholder Governance, Restoration: The Role Stakeholder Governance Must Play in Recreating a Fair and Sustainable American EconomyA Reply to Professor Rock, ESG Disclosure Simplification Act of 2021. It will streamline ESG information collection, whilst providing opportunities for meaningful conversations with borrowers. Moreover, they were promulgated pursuant to a call by the European Parliament to create disclosure requirements that take account of the multidimensional nature of corporate social responsibility (CSR) and the diversity of the CSR policies implemented by businesses matched by a sufficient level of comparability to meet the needs of investors and other stakeholders as well as the need to provide consumers with easy access to information on the impact of businesses on society. In her view, [t]he SEC would be acting, by contrast, without predicate acts by political bodies endorsing the substantive ends sought. In the current era of partisanship, SEC actions to adopt broad new requirements for policy purposes without a solid foundation of authority are likely to be swiftly challenged. The PRI acts in the long-term interests of its signatories, of the financial markets and economies in which they operate and ultimately of the environment and society as a whole.