McHale agreed with this assessment, adding, “Te composite score is really not useful. We worked with many investors around the world to develop a set of 10 indicators that are now part of what’s called the Climate Action 100+ Net Zero Company Benchmark. She noted that investors can use this data as a start-
ing point for deciding how to engage with a company, including filing a shareholder proposal or engaging with company management or the board of directors.
Prioritizing ESG Data Nielsen asked the panelists to comment on how companies should prioritize ESG information to disclose, recognizing that some definitions of ESG can be quite broad. “You’re probably getting approached every day
by a different investor or advocacy group asking you to disclose something new, whether it is deforesta- tion risk, impact of your supply chain, or the use of plastics,” Hoeppner said. “Reporting through SASB or ISSB is a good foundational first step. About half of you have disclosed through those platforms. Tose are the first metrics I would disclose because every major investor has committed to integrating that data into their investment analysis. “I don’t necessarily think you have to always
disclose what your investors want. But I think you should have a good sense of where you might be falling below investor expectations and I hope your investors make that very clear to you. We attempt to get in touch with you as often as possible if you are below a minimum standard. And we’re usually sharing an escalation approach if you don’t make progress over time. So one way to look at what disclosures are required is where you happen to be falling short. You should think hard about it. You don’t necessarily have to go jump and do it right away. “We are just one investor but I think it’s fair to say
we are representative of how European institutional investors have additional expectations. So I’d look at your more progressive investors and say, ‘Tat may be where the puck is going.’” McHale added, “Investors we work with are asking companies to disclose climate action plans that are both backward-looking and forward-looking. It could be part of the company’s annual report, perhaps, but
niri.org/ irupdate
Cynthia McHale
Dan Nielsen
John Hoeppner IR UPDAT E ■ FA L L 2 0 2 3 1 7
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