The 2019 CSA included newly added, updated and replaced criteria. New and updated criteria were based on materiality assessments conducted by SAM. For example, Energy Mix replaced Exploration & Production and Gas Portfolio as a growing number of investors are concerned that reserves will become stranded assets. SAM wants to not only assess on ESG reporting but also ESG performance, therefore, the 2019 CSA introduced more performance-based scoring. Consequently, more elaborate disclosure requirements were introduced for criteria such as Raw Material sourcing. Such updated disclosure requirements have caused general decreases in score in affected industries.
Highlighted criteria that were further discussed in SAM’s webcasts are Information Security/Cybersecurity & System Availability, Privacy Protection, Sustainable Finance and Living Wage. In the attachment on top of the page you will find the complete summary of the beforementioned topics. Below, the main developments of each criteria are briefly discussed. If you are interested in one criterion in particular, click on the headers of each criterion to visit the detailed summary of the corresponding webcast.
Access to network, IT systems, and data should be assured at all times in this digital age. Managing such risks, including contingency plans, is crucial to ensuring business continuity. According to SAM, the exponential growth in information security incidents and their related costs have shown that information security/cybersecurity has become a financially material issue which has to be managed diligently to protect corporate value. This criterion aims to uncover whether the board is engaged in the information security strategy and how the company manages related risks.
Data privacy is rapidly becoming a key issue not just in the technology sector but more broadly across many industries and data has turned into one of companies’ most important assets. Insufficient database and network protection, unclear management of personal information and vague database access rules could expose companies to large risks in case of personal data leakage and misuse, or unauthorized access.
The Sustainable Finance criterion applies to companies in the banks, insurance and diversified financial services industries, and has specific questions for each sector. The focus of this new criterion is on the integration of ESG issues in business segments as well as (examples of) products and services.
The term ‘living wage’ refers to the minimum salary received by workers to cover their basic needs and those of their families. Over time, it has become apparent that the minimum wage set by governments in many countries does not suffice in covering a family’s basic needs. This is why companies are increasingly expected to be responsible for paying their employees in a fair way and rising the living standards of employees and their families. This criterion is currently part of the Future Questions section and is expected to remain there in the CSA 2020.
With more than 15 years of experience in Dow Jones Sustainability Index support and a long-term collaboration with SAM, Finch & Beak has become Europe’s leading expert in assisting companies with their submission to ESG benchmarks. Download the consolidated summary of SAM’s webcasts to get up to date on the learnings of the CSA 2019 and contact Josée van der Hoek, Director, at firstname.lastname@example.org or call her at +31 6 28 02 18 80 for an in-depth look at your organization’s performance.
On the 21st of November, RobecoSAM and S&P Global announced to have agreed to build on the successful existing relationship by transferring the ESG Ratings and ESG Benchmarking Businesses to S&P Global: please refer to the full announcement.