Disclose
Disclose information about practice and performance.
Overview
Investors
A person, organisation, or country that puts money into an business or other organisation. Source: Cambridge English Dictionary A way of doing something that is the usual or expected way in a particular organisation or situation. Source: Oxford English DictionaryInvestor
Practice
Reporting on sustainability practices and performance for investors and financial institutions is less mature compared to that of corporates. However, there are a number of widely adopted voluntary frameworks, and the importance of investor and financial institution disclosures is increasingly recognised by policymakers. One example is the European Union’s Sustainable Finance Disclosure Regulation.
As regulation, standards
Rules or guidelines for common and repeated use to which organisations demonstrate adherence with which compliance is not necessarily mandatory in law. Standards are created through a process of multi-stakeholder consultation. Source: Adapted from ISEAL Information or instructions on how to do something. Source: Cambridge English Dictionary The methods and processes employed to evaluate an organisation’s disclosures about its performance, as well as its underlying systems, data and processes, against suitable criteria and standards in order to increase confidence in the information for use in decision-making. The results are shared in a written conclusion called an assurance statement. Source: Adapted from AccountAbilityStandard
Guidance
Assurance
Resources
CDP Financial Services Disclosure System
Tools for investors, companies, cities, states and regions to manage their environmental impacts. The CDP Financial Services Disclosure System allows for a baseline assessment of climate-related risks, opportunities and impacts in financing portfolios; and of how banks, asset owners, asset managers and insurance companies are preparing for the net-zero carbon transition.
CDP’s Disclosure System
Tool for investors, companies, cities, states and regions to manage their environmental impacts. The CDP Disclosure System supports companies in making their environmental impact transparent to stakeholders, better understanding how they can reduce their impact, and act to become environmental leaders.
For organisations
Use this resource to:
- Identify sustainability topics: Fill in CDP’s questionnaires to understand the relevant climate change, forests and water security impacts to measure, based on the organization’s size, sector, and geography.
- Measure sustainability performance: Use CDP’s questionnaires as sets of environmental metrics.
- Assess impact: Fill in the questionnaires to track change in performance over time. Each question is scored – some with reference to social or ecological thresholds – to help the organisation determine whether it is performing sustainably on that topic.
- Disclose: Report to all stakeholders on climate change, forests and water security. The questionnaires provide a framework for companies to report environmental information to their stakeholders covering governance and policy, risks and opportunity management, environmental targets and strategy, and scenario analysis. Receive an A-D grading based on questionnaire responses.
- Benchmark: Tool allows companies to benchmark their environmental performance against their industry peers and receive feedback on their progress each year. The information disclosed is also used by financial markets for stewardship and engagement, in investment research, new financial products, and global indices and ratings.
For investors and financial institutions
Use this resource to:
- Identify: Use CDP’s questionnaires to understand the relevant climate change, forests and water security impacts to measure.
- Assess: CDP holds the most comprehensive collection of corporate environmental data globally, and the questionnaire is now aligned with the TCFD recommendations. CDP data is disseminated throughout the market, and investors access and use the data in their own investment practices.
- Monitor: Every year, investors working with CDP request environmental information by asking companies to respond to our questionnaires on climate change, deforestation and water security. These investors can then access the companies’ responses and can use the data and insights in their own investment process.
- Benchmark: CDP scores allow companies to benchmark their environmental performance against their industry peers and receive feedback on their progress each year. The information disclosed is also used by financial markets for stewardship and engagement, in investment research, new financial products, and global indices and ratings.
CDSB Framework for Reporting Environmental and Climate Change Information
This reporting framework offers companies seven guiding principles and 12 reporting requirements to help prepare (financially) material and decision-useful environmental disclosures for the mainstream report. CDSB additionally offers topic-specific guidance for companies, such as on climate-related reporting and climate accounting.
For organisations
Use this resource to:
- Integrate and act: Understand how to prepare environmental and climate change information in a way that connects to mainstream financial information.
- Disclose: Report on financially material environmental and climate change information.
For investors and financial institutions
Use this resource to:
- Assess: Understand the measurement and disclosure standards and guidance for organisations, so that investors can provide capacity to the asset to help adherence.
- Disclose: Understand how underlying assets might prepare environmental and climate change information in a way that connects to mainstream financial information.
GRI Standards
Reporting standards designed to help organisations understand and disclose their impacts in a way that meets the needs of multiple stakeholders. These standards are arranged by a set of Universal Standards that apply to all organisations, and 35 Topic Standards that contain disclosures for impacts related to economic, environmental and social topics.
For organisations
Use this resource to:
- Measure sustainability performance: Identify metrics to measure for each significant topic. The standards themselves provide guidance on selecting metrics to report. Using standardised metrics helps the organisation and its stakeholders compare performance with others.
- Disclose: Report to all stakeholders on ‘material topics’ that reflect the organisation’s most significant impacts.
For investors and financial institutions
Use this resource to:
- Assess: Assets use the measurement and disclosure standards and guidance for organisations, and investors can provide capacity to help adherence.
GRI Topic-specific Standards
Reporting standards designed to help organisations understand and disclose their impacts in a way that meets the needs of multiple stakeholders. These standards are arranged by a set of Universal Standards that apply to all organisations, and 35 Topic Standards that contain disclosures for impacts related to economic, environmental and social topics.
For organisations
Use this resource to:
- Measure sustainability performance: Identify metrics to measure for each significant topic. The standards themselves provide guidance on selecting metrics to report. Using standardised metrics helps the organisation and its stakeholders compare performance with others.
- Disclose: Report to all stakeholders on ‘material topics’ that reflect the organisation’s most significant impacts.
For investors and financial institutions
Use this resource to:
- Identify: Refer to the Sector Standards as a starting point for identifying likely significant impacts.
- Disclose: Report to all stakeholders on ‘material topics’ that reflect the organisation’s most significant impacts. The Sector Standards are a helpful starting point for identifying likely significant impacts.
Guiding Principles on Business and Human Rights
The UN Guiding Principles on Business and Human Rights are a set of guidelines for States and companies to prevent, address and remedy human rights abuses committed in business operations.
Use this resource to:
- Strategy: Adopt the standards and practices with regard to business and human rights so as to achieve tangible results for affected individuals and communities, and thereby also contribute to a socially sustainable globalisation.
- Governance: Embed the human rights policy throughout a business’ functions.
- Identify: Understand the responsibility of enterprises to respect human rights, depending on their scale and scope.
- Assess: Implement human rights due diligence.
- Set Targets: Design targets based on human rights due diligence assessment.
- Act: Learn how states and companies can prevent and address negative impacts on human rights by business.
- Monitor: Set up continued human rights due diligence for monitoring purposes.
- Disclose: Make publicly available human rights commitments and processes.
Impact Classification System
Forthcoming: Tool for investors to publicly classify the impact of their portfolios. The tool uses Impact Classes as a means to segment a portfolio by type of impact on two axes: the impact of underlying assets (A, B or C) and investor’s contribution. Users can also express the portfolio’s contribution to SDGs.
Use this resource to:
- Assess: Assess the actual or expected performance of a portfolio of investments using classification.
- Disclose: Publicly disclose the performance of a portfolio of investments using classification.
Integrated Reporting Framework
Reporting framework that provides principles-based guidance for organisations seeking to create an integrated report, containing both financial and non-financial information. The guidance is tailored specifically for private sector, for-profit companies, but the Framework can also be applied to the public sector and non-for-profit organisations.
For organisations
Use this resource to:
- Integrate and act: Follow integrated thinking principles to improve the organisation’s understanding of the connectivity and interdependencies between the range of factors that affect an organisation’s ability to create value over time.
- Disclose: Report to providers of financial capital on sustainability topics that are likely to affect value creation over the short-, medium-, and long-term.
For investors and financial institutions
Use this resource to:
- Disclose: Report on sustainability topics that are likely to affect value creation over the short-, medium-, and long-term.
Operating Principles for Impact Management
Principles describe essential features of managing investments into companies or other organisations with the intent to contribute to measurable positive social or environmental impact alongside financial returns.
This resource has mandatory requirements for signatories.
Use this resource to:
- Strategy: Define strategic impact objectives consistent with the investment strategy alongside managing strategic impact on a portfolio basis.
- Governance: Commit to following the principles and periodically having progress of adoption independently verified. The Principles can be applied to an entire investing organisation or an individual fund.
- Monitor: Use criteria for which investor’s impact management practices can be monitored. The principles require these disclosures to be independently verified.
- Disclose: Use Principle 9 to enable public disclosure of alignment with the Principles.
Principles for Responsible Banking
Principles for Responsible Banking (PRB) are designed to ensure that signatory banks’ strategy and practice align with the vision society has set out in the Sustainable Development Goals and the Paris Climate Agreement.
Use this resource to:
- Strategy: Commit to aligning the bank’s activities and portfolios to global goals, namely the Sustainable Development Goals (SDGs) and the Paris Agreements, by embedding sustainability at the strategic, portfolio and transactional levels, across all business areas. This initiative involves a fee for participation and requires periodic disclosure of progress made towards enforcing the Principles.
- Disclose: Use the PRB Assurance Guidelines to assure adherence to the Principles.
Reporting and assessment framework
Tool to report on responsible investment activities annually.
Relevance to Portfolio of assets:
- Disclose: Report on firm-wide and portfolio or strategy-specific investment practices.
SASB Standards
Reporting standards that provide industry-specific disclosure topics and associated metrics that measure performance against 26 General Issue Categories (or sustainability topics). Management or mismanagement of performance on these sustainability topics may create, preserve or erode value for the typical company in a given industry over time.
For organisations
Use this resource to:
- Identify sustainability topics: Identify the relevant industry standard to find industry-specific topics and accounting metrics. These standards can be a useful input when identifying which sustainability topics to disclose.
- Measure sustainability performance: Identify metrics from the standards. The standards themselves provide guidance on selecting metrics to report. Using standardised metrics helps the organisation and its stakeholders compare performance with others.
- Estimate value created: SASB evaluates sustainability topics for inclusion in the Standards by assessing whether a given topic is reasonably likely to materially affect the financial condition, operating performance, or risk profile of a typical company within an industry. Collecting information on these metrics provides insight that can inform estimation of value to the organisation.
- Disclose: Report to providers of financial capital on sustainability topics that are likely to affect how value is created, sustained or eroded for the organisation over the short-, medium-, and long-term.
For investors and financial institutions
Use this resource to:
- Assess: Assets use the measurement and disclosure standards and guidance for organisations, and investors can provide capacity to help adherence.
Sustainable Finance Disclosure Regulation (SFDR)
Regulation that sets out sustainability disclosure requirements for financial market participants within the EU. It includes disclosure requirements for firm-level as well as for investment products. Disclosure requirements cover mitigation of negative impacts termed ‘principal adverse impacts’ and performance on sustainable investment objectives.
Use this resource to:
- Disclose: Review regulation for disclosure requirements for financial market participants in the EU
TCFD recommendations
Guidance that contains disclosure recommendations for information on the material financial impacts of climate-related risks and opportunities, including those related to the global transition to a lower-carbon economy. The TCFD recommendations are structured around the four pillars of Governance, Strategy, Risk Management, and Metrics and Targets.
For organisations
Use this resource to:
- Disclose: Follow recommendations to structure climate-related financial disclosures. Other voluntary standards can be used in conjunction with TCFD recommendations.
For investors and financial institutions
Use this resource to:
- Disclose: Follow recommendations to structure climate-related financial disclosures. Other voluntary standards can be used in conjunction with TCFD recommendations.
Definitions
Investor
A person, organisation, or country that puts money into an business or other organisation.
Source: Cambridge English Dictionary
Practice
A way of doing something that is the usual or expected way in a particular organisation or situation.
Source: Oxford English Dictionary
Standard
Rules or guidelines for common and repeated use to which organisations demonstrate adherence with which compliance is not necessarily mandatory in law. Standards are created through a process of multi-stakeholder consultation.
Source: Adapted from ISEAL
Guidance
Information or instructions on how to do something.
Source: Cambridge English Dictionary
Assurance
The methods and processes employed to evaluate an organisation’s disclosures about its performance, as well as its underlying systems, data and processes, against suitable criteria and standards in order to increase confidence in the information for use in decision-making. The results are shared in a written conclusion called an assurance statement.
Source: Adapted from AccountAbility
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