“We’ve built our firm around creating the analytics so that our clients can meet any ESG standards” that are developed. Companies will need to be able to provide the data in a proper context so they are understandable to advisors, investors and regulators.”
The efforts to standardize ESG definitions and regulations will play into businesses’ efforts to create long-term value in their companies, said Lawrence Di Rita, who leads global public policy and environmental strategy at Bank of America in Washington, D.C.
“Investors and other stakeholders will want to be able to understand standards that are developed” and how they can affect the companies’ returns, he said. “There are no more excuses for not providing this information.”
The urgency in taking action is here now because “the regulatory landscape is shifting under our feet. Meeting ESG standards is not only going to be a best practice in the future, but it will also be a required practice,” added Samans.
De Rita said large companies, like Bank of America, will be able to meet ESG reporting standards, but smaller companies will be challenged to do so.
Bhowmik cautioned that all companies should be developing the means to measure the social and governance aspects of ESG. “The ‘E’ is easier to measure and report.” She also encouraged investors to let companies know what kind of information they want to see.