When measuring sustainability, one size won’t fit all
16 September 2011 -

Amsterdam, September 14, 2011 – When measuring sustainability, one size won’t fit all. That’s one of the conclusions of a recent Corporate Responsibility symposium held here on approaches to extending the application of Corporate Social Responsibility best practices.

Held on September 9th at The Mint Hotel, the second Green Place Symposium brought together asset managers, asset owners, regulators, analysts and CSR managers to discuss the topic “Mainstreaming ESG: Creating a winning formula for the triple bottom line”. Discussion points included whether a standard for following ESG criteria was possible and what upcoming legislation on a regional European level we can expect.

The speakers were:
Márcia Balisciano, Director of Corporate Responsibility from Reed-Elsevier;
Susan Bird, Policy Coordinator CSR, DG Employment, Social Affairs and Inclusion, European Commission; Marleen Janssen Groesbeek, Policy Advisor for Sustainability from EUMEDION;
Giuseppe van der Helm the President of EUROSIF and Managing Director of VBDO;
Erik-Jan Stork, Senior Sustainability Specialist from APG Asset Management;
Diederik Timmer, Managing Director of Sustainalytics and
Harald Walkate, Senior Vice President, Aegon Asset Management.

Marleen kicked-off the discussion by giving an overview of CSR and how it now relates to the financial world. She explained how the driving force had shifted over the years from environmental and social concerns to risk management. Asset managers and asset owners are increasingly incorporating EconomicEnvironmental, Social and Governance sustainability criteria to investment strategies. But they are struggling to achieve a coherent standard approach. Marleen’s conclusion was that a standard approach is neither desirable nor attainable: “there is no one-size-fits-all standard or definition to what should be followed regarding CSR,” she said.

Diederik of Sustainalytics agreed that no standard fits all industries and advocated sector- specific analysis and said this was now becoming a trend. Both speakers criticised the Dow Jones Sustainability Index for being too general to properly and accurately rate companies.

Harald of Aegon Asset Management said he does not expect an ESG standard to evolve even though many organisations, investors and companies would like to see one. He foresees a standard procedural approach and the emergence of an investor toolbox with a range of tools enabling us each to pick the tool that works best.

APG sustainability specialist Erik-Jan stressed the importance of finding the appropriate data in comparing companies in order to make informed asset selection decisions for the longer term. The Dutch asset manager manages EUR 275 billion, mainly pension assets, and has the motto “Tomorrow is Today”. Nevertheless, said Erik-Jan, persuading investors to take a longer term view was a challenge as most are still mired in short-termism.

Sue from the EC reminded the audience that binding legislation on reporting on ESG has existed within the European Union since 2003 and yet there is wide variance in the way member states implement national legislation. She said the European Commission was committed to producing legislature on non-financial reporting in 2012 that will incorporate mandatory compliance and voluntary elements.

Giuseppe from Eurosif described the OECD guidelines on implementing ESG criteria as “heavy on supply chain management and human rights” and noted that there is a grievance mechanism whereby companies, investors or lender might be sued by third parties if there is a problem with ESG. Giuseppe said that a good starting point is comply or explain, as the main issue is for a policy to be in place and report on that policy.

On the company side, Márcia explained how Reed Elsevier takes into consideration the full spectrum of non-financial performance and strongly believes this adds economic value. She concluded by saying that for her ESG stands for Earn Stakeholder Goodwill.

The speakers and audience agreed that we need a smart mix of voluntary and regulatory measures to graft sustainability concerns more firmly onto the bedrock of the world economy. There is no ESG standard on the horizon, but a procedural structure can be developed at a global level, allowing issues and details to be decided upon on a more local level.