MSCI Launches Industry Materiality Map
The assessment of "materiality" refers to the determination of the significance of the information and is a key concern for current ESG investments, but is also a key point that is often misunderstood. Among the many factors used to assess the sustainable performance of an investment or product, materiality has a significant impact on the relative ESG performance of its subject, but it can be difficult to determine the relative importance of each factor. Assessing materiality across multi-industry investments is even more challenging because the various factors may have different weights from industry to industry. Likewise, investors, as users of the rating results, remain opaque to the rating provider's scores if they do not understand the level of importance assigned to each factor.
The MSCI Materiality Map demonstrates enhancements to the latest ESG rating model, including a greater focus on corporate behavior, such as fraud and anti-competitive practices, across all industries, as well as improved weights for governance. The model update is based on MSCI ESG Research's annual rating model consultation, which draws on input from some of the world's largest institutional investors.
Morningstar Formally Integrates ESG into Its Analysis of Stocks, Funds, and Asset Managers
Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment research, today announced it has begun formally integrating environmental, social, and governance (ESG) factors into its analysis of stocks, funds, and asset managers.
Morningstar equity research analysts will employ a globally consistent framework to capture ESG risk across over 1,500 stocks. Analysts will identify valuation-relevant risks for each company using Sustainalytics' ESG Risk Ratings, which measure a company's exposure to material ESG risks, then evaluate the probability those risks materialize and the associated valuation impact. Results from this research will inform Morningstar's assessment of a stock's intrinsic value and the margin of safety required before assigning a Morningstar Rating™ for stocks between five- and one-star. Morningstar acquired Sustainalytics, a globally recognized leader in ESG ratings and research, in July 2020.
SFC Consultation on Proposed Requirements on Fund Managers to Manage and Disclose Climate-related Risks
On 29 October 2020, the Securities and Futures Commission of Hong Kong (SFC) launched a “Consultation Paper on the Management and Disclosure of Climate-related Risks by Fund Managers”, which proposes to introduce new and specific requirements for Hong Kong SFC licensed fund managers to consider climate-related risks in their investment and risk management processes, and to make appropriate disclosures to meet investors’ growing demand for climate risk information and combat greenwashing.
Deloitte Releases the HKSE 2019 ESG Implementation Review and Corporate Sustainability Management Enhancement Study
Since the Stock Exchange of Hong Kong ("HKEX") upgraded the Environmental Social and Governance Reporting Guidelines ("ESG Guidelines") in 2015 in stages to "Explain if you don't comply," For the third consecutive year, Deloitte has conducted a review and analysis of ESG information disclosure of listed companies on the Hong Kong Stock Exchange; on July 1, 2020, the new ESG Guidelines of the Stock Exchange came into effect, further enhancing the requirements on ESG governance, practice and disclosure of listed companies; the Shanghai Stock Exchange discussed ESG Guidelines in depth, and information disclosure of A-share market will enter the era of strong regulation. Therefore, Deloitte further enriches the sample scope in the 2020 analysis, and analyzes the ESG disclosure situation of Hong Kong listed companies and A-share listed companies in FY2019 on the basis of sustainable development trends. Through this analysis, we aim to help enterprises better understand ESG content and face external regulatory requirements and investor inquiries with ease; assist enterprises in understanding the current ESG disclosure status and regulatory dynamics in the market, reasonably plan ESG management plans, and improve ESG performance; provide suggestions and implementation ideas for future ESG management, and help enterprises optimize their sustainable development management.
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