By simplifying and harmonizing existing market practices, this new industry-led initiative will reduce the burden on borrowers while improving the materiality and comparability of ESG disclosure for investors, Ji Krl, global head of the Alternative Credit Council,said in a statement. 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. 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. For example, issuers have begun to market SDG bonds, which are bonds earmarked to raise money for projects that align with SDGs. We would like to express our deep gratitude to Professor . "The harmonized template allows for data consistency, as well as broader market education on what the industry is looking for with respect to ESG disclosure. While most ESG disclosure is made on a voluntary basis, that is beginning to change, particularly in Europe, as regulators are becoming increasing proactive. The template offers private companies a baseline from which to develop their ESG reporting capacity. Structure the board to be effective and add value. Endnotes 1 According to the Governance & Accountability Institute, in 2018, 86% of S&P 500 companies published ESG or sustainability reports. The template and supporting educational materials are available at www.esgidp.org. Some U.S. legislators have recognized that political action may be necessary to effect major change, and there is already proposed legislation. 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. We look forward to working with our members and partners to support the widespread adoption of this disclosure template., Tess Virmani, Executive VP and Head of ESG at LSTA, said: Investors and regulators have made it clear that the status quo is untenable, and the credit market recognizes the need for harmonized ESG reporting. Hubbell Incorporated (est. The goal of harmonizing and standardizing ESG information requests is to establish a global baseline of ESG information across credit markets. NEW YORK & LONDON, November 08, 2022 -- ( BUSINESS WIRE )--A group of leading alternative asset managers and industry bodies in the private and broadly syndicated credit markets have today. Sue Lloyd, ISSB. It was natural that these global efforts, dating back some years, would focus on disclosure. The ESG IDP Templates Industry-specific tab(s) questions are sourced entirely from the SASB Standards. As a society, it is important to ask whether the SECs reporting framework would be an effective or appropriate venue for shaping corporate policy and driving corporate activity, whether the repurposing of that framework would be a legitimate exercise of regulatory authority, and finally, whether all of these questions are more appropriately resolved through public discourse than by regulatory fiat. October 26, 2021 - by Tess Virmani. (go back), 4See CDP, Why disclose as a company, available here. Join our mailing listfor the latest breaking ESG investment news! The template and supporting educational materials are available at www.esgidp.org. In a move to improve transparency and consistency regarding environment, social and governance disclosures for private companies and credit investors, a group of alternative asset managers have launched a template for ESG disclosure. 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. 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. Moreover, the landscape is changing rapidly so issues that yesterday were only peripheral today are taking on greater importance. Given the diversity of corporate America, it is highly unlikely for any particular ESG issue to be material, or even relevant, to all companies. At the top of the agenda is climate change disclosure, and the Commission is taking steps toward broader reform. The sheer number of reporting standards and rating systems in the ESG disclosure landscape has created new challenges for organizations, which may incorporate and be evaluated by multiple frameworks. These disclosures are increasingly discussed in third-party analyses of ESG track records, as well. While public companies tend to adjust their behavior when forced to disclose information, they also adjust to those adjustments, potentially resulting in a range of downstream effects that are less likely in a regime of voluntary disclosure. The TCFD published its final recommendations in June 2017. View source version on businesswire.com: https://www.businesswire.com/news/home/20221129005429/en/. 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). CDP Global (formerly the Carbon Disclosure Project) is an international non-profit organization that has established an environmental disclosure platform, which collects standardized information from companies on climate change and the use of natural resources such as water and soft commodities. The ACCs core objectives are to provide guidance on policy and regulatory matters, support wider advocacy and educational efforts and generate industry research with the view to strengthening the sectors sustainability and wider economic and financial benefits. The ESG Integrated Disclosure Project provides a clear and transparent approach for the disclosure of ESG information, and provides clarity to companies regarding the information investors need. The ESG IDP is also supported by a coalition of market stakeholders including CDP, the ESG Data Convergence Initiative and the Loan Market Association. In June 2020, the UN Development Programme released new standards for consultation that aim to guide private equity fund managers and bond issuers in directing investments towards the SDGs. We believe that this harmonized approach will increase the availability of ESG disclosure for both LPs and GPs., Jeff Cohen, Head of ESG & Sustainability at Oak Hill Advisors and the inaugural Vice Chair of ESG Integrated Disclosure Project, stated: We are excited to contribute to and support the ESG IDP, which applies a credit lens to the globally-recognized SASB standards to prioritize the subset of ESG factors most likely to be core to a companys operations and, as a result, beneficial to lender underwriting. Copyright 2023 Asset International, Inc. All Rights Reserved. Standardised template to drive enhanced transparency and accountability. Signatories to the PRI commit to adopt and implement its six aspirational principles (the Principles): to incorporate ESG issues into investment analysis and decision-making processes; be active owners and incorporate ESG issues into asset ownership policies and practices; seek appropriate disclosures on ESG issues by investee companies; promote acceptance and implementation of the Principles within the investment industry; work together to enhance our effectiveness in implementing the Principles; and. "This is a big step for the industry - and great to see Novata has moved so swiftly to incorporate ESG IDP into their platform. Successfully Handling Ransomware and Other Cybersecurity Incidents, Corporate Practice of Medicine Financings, Private Credit Industry Conference on Direct Lending and Middle Market Finance, Morningstar LSTA Leveraged Loan 100 Index Stats, Collapse of SVB and What it Means for the Loan Market Presentation, Collapse of SVB and What it Means for the Loan Market Replay, 2023 LSTA and LMA Joint London Conference Presentations, LoansMagazine_Winter2023_013123_TVArticle.pdf. Carefully designed safe harbors are likely to encourage issuers to provide more meaningful disclosures and to foster dialogue between issuers and investors to improve reporting. Alternative credit managers launch ESG integrated disclosure tool | News and press | PRI 8th November 2022 - A group of leading alternative asset managers and industry bodies in the private and broadly syndicated credit markets have today announced the launch of the ESG Integrated Disclosure Project (ESG IDP) template. The 600-plus members of the LSTA include commercial banks, investment banks, broker-dealers, hedge funds, mutual funds, insurance companies, fund managers, and other institutional lenders, as well as service providers and vendors. While portions of this draft bill are problematic, it illustrates the significance of some of the actions currently contemplated by the SEC and further suggests that the legislative process may be the proper forum for the large questions in this area to be considered and resolved. If the SEC ultimately does require reporting of ESG information that is not financially material, there should be no liability for issuers beyond SEC enforcement or federal prosecution of intentional fraud. It will streamline ESG information collection, whilst providing opportunities for meaningful conversations with borrowers. It also included a reference to a key ESG concept The Alternative Credit Council represents 250 asset management firms that manage over $600 billion of private credit assets. Launched in New York in 2006, the PRI has grown to more than 5,000 signatories, managing over $120 trillion AUM. Today, the Principles for Responsible Investment (PRI) in partnership with the United Nations Environment Programme Finance Initiative (UNEPFI) and the Generation Foundation released the Canada Legal Framework for Impact policy report. For more information, please visit https://curleyglobalir.com. ESG Integrated Disclosure Project Download Template Now The ESG Integrated Disclosure Project (ESG IDP) is an industry initiative bringing together leading lenders in the private credit and syndicated loan markets to improve transparency and accountability. It is designed to be completed by borrower companies and shared with their lenders. Preferences: Customise the site content to be more relevant to you. LevelC-LevelSVP / EVPDirector / VPManager / SupervisorMid or Entry LevelFreelance / ContractStudent / InternRetiredOther, FunctionAccounting & FinanceBusiness Development & SalesCustomer SupportFacilitiesHR & TalentInvestingLegalMarketing & CommunicationsOperationsR & DProcurement & ContractingSupply Chain & DistributionSustainabilityStrategyTechnologyOther. 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. For investors, the ESG IDP template enhances their ability to identify industry-specific ESG risks in their credit portfolios and compare meaningful data across alternative asset managers more consistently. ESG issues affect the full spectrum of business organizations, large and small. ACC members provide an important source of funding to the economy. A growing, disruptive cutting-edge technology is actually helping humans and society. They provide finance to mid-market corporates, SMEs, commercial and residential real estate developments, infrastructure as well the trade and receivables business. 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? The LSTA undertakes a wide variety of activities to foster the development of policies and market practices designed to promote just and equitable marketplace principles and to encourage cooperation and coordination with firms facilitating transactions in loans. Its success now requires adoption, which we strongly urge, together with the other ESG IDP supporters., Michael Kashani, Head of ESG Credit at Apollo and the inaugural Chair of the ESG IDP, stated, I am thrilled to be a part of the ESG IDP as it represents an important step in addressing ongoing ESG disclosure challenges in the private credit markets. It is unclear how much ESG-related information is financially material in the conventional sense, meaning that broad ESG disclosure requirements risk being seen as policymaking rather than content-neutral regulation. [10] Even in the absence of mandatory disclosure regimes, the focus across so many segments of society on ESG themes will likely mean that ESG topics will figure with increasing prominence in public disclosures (as they already do in public discourse). environmental, social and ethical-related disclosures in the annual or integrated reports of a sample of mining companies in South Africa. Effective disclosure would enable companies to demonstrate that they were responding to stakeholder concerns. 1.A.4 The investment manager must not, in an esg disclosure statement: a. S&P Global Settles Mortgage-backed Security Case with SEC, 702 King Farm Boulevard, Suite 400, Rockville, MD 20850 / +1 212-944-4455 /. The project is led by the Alternative Credit Council-the private credit affiliate of the Alternative Investment Management Association-the . project for the title at FGV EAESP. Novata Launches Framework to Support ESG Integrated Disclosure Project. "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. No Reproduction Without Prior Authorizations. If you continue to use this site we will assume that you are happy with it. 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. Save my name, email, and website in this browser for the next time I comment. Not long ago, ESG issues occupied a narrow niche among investment professionals and NGOs. This week we cover February's Softer Secondary; Sustainability Guidance; ISO Rosetta Stone. -2.2% one-year net investment return. The SEC could establish a temporary non-enforcement period during which companies can work on data collection, internal processes, and controls. 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. Supported by the United Nations, it works to understand the investment implications of ESG factors and to support its international network of investor signatories in incorporating these factors into their investment and ownership decisions. (go back) It is entirely reasonable for a person to feel that climate change deserves immediate attention from lawmakers and still question whether the SEC mandating new disclosures from U.S. public companies is an appropriate step for the agency. It can also strengthen corporate reputations and trust with stakeholders. These new metrics help promote greater harmonization and consistency of disclosure of key ESG indicators for borrowers in private credit and syndicated loan transactions. Log ins towww.aima.org are provided to AIMA member contacts registered with us. If the agreement on the Global Biodiversity Framework (GBF), the so-called 'Paris for plants', in Montreal last year told us anything, it's that addressing the impacts of climate . 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. 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. Related research from the Program on Corporate Governance includes The Illusory Promise of Stakeholder Governance by Lucian A. Bebchuk and Roberto Tallarita (discussed on the Forum here); Socially Responsible Firms by Alan Ferrell, Hao Liang, and Luc Renneboog (discussed on the Forum here); and For Whom Corporate Leaders Bargainby Lucian A. Bebchuk, Kobi Kastiel, and Roberto Tallarita (discussed on the Forumhere). Its not climate change that needs to be tackled. The ACC is an affiliate of AIMA and is governed by its own board which ultimately reports to the AIMA Council. Copyright 20192023 Loan Syndications & Trading Association, March 15, 2023 - As discussed last month, in January the SEC reproposed its 2011 Prohibition Against Conflicts of Interest in Certain Securitizations Rule (the Proposed, March 15, 2023 - On March 14th the LSTA hosted a webinar, The Collapse of Silicon Valley Bank and What it Means for the Loan, On Friday, March 10, 2023, the FDIC was appointed a receiver of Silicon Valley Bank (SVB). 1United Nations Development Programme, Press Release, UNDP launches standards for bond issuers and private equity funds seeking SDG impact (June 16, 2020), available here. It is the political power of the fossil fuel industry. The ESG IDP was formed to establish a global baseline for ESG disclosure across the private and broadly syndicated credit markets. The Principles for Responsible Investment (PRI) is the worlds leading proponent of responsible investment. Whether they wish to preserve or expand it, both traditionalists and progressives agree that the existing disclosure framework was designed for a specific purpose and in its current form is ill-suited to the informational needs of stakeholders and society at large. The Rise of the Robots is Happening. She said stakeholders must give the board "a clear steer on priorities because if we were to do the . Earlier this year, the Securities and Exchange Commission said ESG-related issues would bea major focusof the regulator this year. Standardised template to drive enhanced transparency and accountability 7th November 2022 A group of leading alternative asset managers and industry bodies in the private and broadly syndicated credit markets have today announced the launch of theESG Integrated Disclosure Project(ESG IDP) template. There is unprecedented interest in ESG at the current moment. The ESG IDP represents a year-long industry collaboration to harmonize ESG reporting to address the key challenges in the private credit and syndicated loan markets. If ESG disclosure is mandated for the purpose of driving changes in corporate behavior, then it may be likened to other types of regulation, such as taxes, that affect corporate behavior and require democratic legitimization. (go back), 9SASB, Press Release, Promoting Clarity and Compatibility in the Sustainability Landscape: GRI and SASB announce collaboration (July 12, 2020), available here. The LMA are delighted to support such a valuable project.. 167 Fleet Street, London, EC4A 2EA, United Kingdom. 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. Humans and society increasingly discussed in third-party analyses of ESG track records, as well by the Alternative Management... 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