The Investment Consultants Sustainability Working Group (ICSWG) has published a list of 12 environmental, social and governance (ESG) reporting metrics for public equity and public credit asset managers to report on.

They are based on metrics that the ICSWG’s member firms’ institutional clients are increasingly seeking to collect from asset managers.

The ICSWG’s aim is to assist asset managers in producing appropriate data and support investors in obtaining the desired level of transparency by aggregating the metrics into one guidance document.

It urged all public equity and public credit investment managers who do not yet report of the metrics to work towards being able to do so.

The metrics include those already required as part of the Task Force on Climate-related Financial Disclosures (TCFD), such as absolute carbon emissions and carbon footprint, alongside a wider range of social and governance factors, such as the independence of boards and violators of the UN Global Compact Principles.

Furthermore, the list aims to provide clarification across the industry through the use of the ICWG’s new definition of what constitutes engagement, as outlined in its Engagement Guide launched earlier this year, and in preparation for the launch of the group’s broader asset manager principle that are due to be announced in the coming months.

The list will be maintained and updated on an annual basis, with the group considering additional metrics to include in the future such as Scope 3 emissions, implied temperature rise, natural capital/biodiversity measures and broader social metrics.

“This is a massive step forward in standardising the ESG data reporting that managers provide,” said Isio deputy head of ESG research and ICSWG member, Cadi Thomas.

“Not only will these metrics enable our clients to efficiently assess their portfolios with regards to ESG risks, we hope it will encourage greater efforts to improve scores, which can only create better outcomes for the environment and society as well as members of pension schemes.”

Telefonica UK Pension Plan Trustees chair, Anthony Soothill, added: “Pensions are rightly in the vanguard of ESG. We are after all literally investing for the future of our members.

“However, the absence of a standard approach makes it difficult to assess different products and investment managers.

“This list, if adopted, would enable investors like us to make decisions based on a set of simple, clear and consistent metrics across the whole range of investment products.

“By doing so it would also make what we do on ESG more transparent and understandable to our members. I would encourage all managers to adopt it.”

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