A FTSE SMALL CAP Company Secretary writes...
We have received a draft ESG Controversies Report (nil ESG controversies) and an ESG Rating report from MSCI ESG Research, Their website says “ MSCI ESG Research provides in-depth research, ratings and analysis of the environmental, social and governance-related business practices of thousands of companies worldwide. Our research is designed to provide critical insights that can help institutional investors identify risks and opportunities that traditional investment research may overlook. Our clients use our research to help implement their responsible investment objectives”
Does anybody engage with MSCI and provide feedback on their draft reports?
The Company has not heard from this outfit and only participates in the Carbon Disclosure Project.
Only the Dow Jones Sustainability Indices are considered credible by colleagues here.
Yes, we have received such a report in draft and commented on it where there are factual errors . MSCI are a major international index provider and have a significant circulation.
No, we do not engage with MSCI (I am not aware that we have been approached by them) and if we were we would be unlikely to provide feedback on their draft reports.
Obviously it is a matter of judgement for each company and as regards each analysis organisation, but my company’s views are:-
(a) we would rather concentrate on our own direct communication/engagement with stakeholders on ESG matters, rather than through an intermediary
(b) there is, frankly, a bit of an “industry” going on here, with self-appointed analysis organisations persuading companies to provide the organisation with information, only for that organisation then to use this information in the “product” that it sells to third parties
In similar vein, CDP seek information from companies, and when we refused to engage in this process their comment was: “If you do not take action, XXX plc will receive an ‘F’ for failing to provide sufficient information”. We had to point out to them the XXX plc was not “failing” to do anything, and we wanted it to be recorded that XXX plc had chosen not to participate with CDP, and if anyone required information, they were free to find this on the company’s own website.
No. We are advised that Manifest are not particularly influential at AGM time. Our approach has been to focus on improving the content of the CR report (which forms part of the Strategic Report) to increase its relevance and integration with the overall investment story. This makes clear that we share a strong commitment to acting responsibly, ethically and with integrity in our interaction with clients and staff, our role in the wider community and our environmental footprint. We also state that the management of related risks is integrated within our wider risk management framework, reported on to the Board and that our sustainability objectives are to support the group’s long-term strategy. The nature of our business is such that the ESG risks faced are relatively limited and the management of sustainability issues is part of our daily business.