Einde inhoudsopgave
Corporate Social Responsibility (IVOR nr. 77) 2010/12.2.2.3
12.2.2.3 Consolidation of services provided by ESG Agencies
Mr. T.E. Lambooy, datum 17-11-2010
- Datum
17-11-2010
- Auteur
Mr. T.E. Lambooy
- JCDI
JCDI:ADS363383:1
- Vakgebied(en)
Ondernemingsrecht (V)
Voetnoten
Voetnoten
E.g. Robeco owns the majority of the issued shares in SAM.
Many companies indicate that they have been overloaded with different kinds of questionnaires on their ESG performance. Questionnaires are submitted by ESG Agencies and other external parties such as NGOs.
E.g. note the recent merger between Riskmetrics and Innovest.
The ESG information provider 'Asset4' seems to be an important provider of 'raw data' for ESG Agencies.
The SiRi Group was started in 2000 as a not-for-profit entity. The Group members founded SiRi Company as a profit entity in 2003. The Group consisted of ten ESG Agencies. Quoting from their 2004 brochure: 'SiRi Company Network Partners provide SRI research on corporations based in their respective home markets, in a harmonized format, and with strict quality standards set by SiRi Company. This gives clients the benefits of global coverage based on local knowledge',p.2.
It was noted by various interviewees that mergers of ESG Agencies with financial sector parties could stimulate the integration of ESG aspects into mainstream investment decision-making. For example, this could be achieved by mergers between ESG Agencies and credit rating agencies, or by establishing closer links between asset management companies and ESG Agencies.1 Several asset managers stated that they would be interested in purchasing combined ratings on financial and ESG issues. Firstly, because it would be more practical and cheaper if they could purchase all information required from one source, and secondly, because the financial implications of ESG issues would become clearer.
One of the asset managers stated that he would be in favour of further consolidation between ESG Agencies, as occurred earlier with credit rating agencies. The consolidation of ESG Agencies could contribute to the development of clearer and completer information about ESG issues as well as uniform standards. Clearer and more standardised measuring methods could result in more complete and consistent analyses, and would also reduce 'the questionnaire Burden2 on companies. Common standards would also allow asset managers to communicate a more uniform message in engagement activities with companies.
One of the ESG Agencies interviewed noted a tendency towards mergers and close partnerships between ESG Agencies.3 As maintaining and updating databases is expensive, it would make sense for ESG Agencies to share this burden. A number of the interviewed ESG Agencies expressed an interest in this. Some of the agencies already purchase information from their competitors to reduce costs.4 Standardisation of information would also be welcomed because it could enhance the compatibility of the ratings.
On the other hand, there appears to be a good deal of competition between ESG Agencies. The approaches used by ESG Agencies vary widely as do their products. The comparability of information is limited. Most asset managers buy information from more than one ESG Agency so as to get a more complete overview. Different approaches taken by ESG Agencies also serve different types of clients. Cooperation is not always sustainable, as became apparent from the discontinuation of the SiRi network in the autumn of 2008.5 Likewise, with regard to the merger potential between ESG Agencies and credit rating agencies, an NGO noted that there is still a great ' mental distance' between the two. Although the lack of standards and uniformity is confirmed by all of the interviewees, there are different perspectives on whether or not this barrier should be ' tackled' by a consolidation of ESG Agencies.