Asset management companies must currently wade through a wide array of extra-financial information which is neither standardised, comparable, stable over time nor audited. Therefore, amid the increasing volume of company-reported ESG data, a reference list of extra-financial indicators is urgently needed.
The objective is twofold: determining which extra-financial information is needed to assess a company, to avoid getting bogged down in an “information overload”; and forging a dialogue with companies, to build a reporting framework complying with regulatory requirements.
AFG set a goal to identify a maximum of 10 cross-sector indicators for each of the following pillars: Environment, Social / Human capital, Societal and Governance, that could be used to assess companies of all sizes.
A maximum of 10 essential extra- financial indicators were defined for each pillar to help asset management companies make consistent company assessments (list of “essential indicators”). Secondly, other themes in which investors need transparency were then also identified, to be used to open up a dialogue with companies (list of “transparency indicators”).
Finally, AFG identified areas to be addressed jointly by companies and investors.
- AFG identified areas to be addressed jointly by companies and investors. Finally, a first version of the guide was presented to companies in July 2020. This dialogue led to a change in the essential and transparency indicators.
- Essential extra-financial indicators to assess a company – August 2020 update