8/8/22 Philadelphia Mastermind Group Meeting

August 2022 Philadelphia Mastermind Group Key Take Aways!

• ESG (Environmental, Social and Governance) is a framework for risk management for corporations and investors. (Danielle Barrs – EisnerAmper)
• ESG has been around for a while but was in hibernation and may have resurfaced due to issues surrounding energy independence, supply chain issues and other pandemic related risks, as well as more access to data. (Danielle Barrs – EisnerAmper)
• ESG focuses on metrics and KPIs in the areas of Environmental (energy, greenhouse gas emissions, recycling, waste management, Social (DE&I, health and safety, employee relations – especially with a younger workforce), and Governance (increased awareness, executive compensation, equity on boards, data security). (Danielle Barrs – EisnerAmper)
• 100% of the largest 100 REITS are reporting their ESG efforts publicly. 78% are reporting their carbon emissions, which is nearly double from just a few years ago. (Danielle Barrs – EisnerAmper)
• ESG concerns are not just for large companies. In some cases large companies are requiring companies they do business with to follow certain ESG guidelines. (Danielle Barrs – EisnerAmper)
• 92% of S&P companies are submitting sustainability reports. These are not required and are being submitted voluntarily. (Danielle Barrs – EisnerAmper)
• Sustainability reports began as a tool for investors. While some reporting does follow a specific framework when required by government organizations, sustainability reports can be anything the company chooses to submit. (Danielle Barrs – EisnerAmper)
• Some companies are “greenwashing”, making claims about their ESG and sustainability efforts that are not true, deceptive or incomplete. In some cases, this is resulting in fines or other reputation issues. (Danielle Barrs – EisnerAmper)
• There is a distinction within ESG between Financial Materiality and Environmental & Social Materiality, with the former having a direct impact on a company’s financials and the latter having an environmental and social impact on the community around them. (Danielle Barrs – EisnerAmper)
• ESG rating system only measures your financial risk and must be disclosed to investors. (Danielle Barrs – EisnerAmper)
• ESG rating systems need improvements to create more consistency and to close loopholes companies use to improve ratings without truly improving their environmental or social footprints. (Danielle Barrs – EisnerAmper)
• The four TCFD (Task Force on Climate-Related Financial Disclosures) standards for reporting to the SEC are Governance Framework, Strategic Planning, Risk Management, Metrics and Targets. These are focus areas and not the same as the pillars. (Danielle Barrs – EisnerAmper)
• A GRESB assessment is reported on annually whereas a LEED certification can be acquired without further follow up to be sure the sustainability efforts continue. (Danielle Barrs – EisnerAmper)
• Sustainability Linked Loans and Green Bonds / Green Loans are becoming more popular and can help get a discount on loans for sustainable projects. (Danielle Barrs – EisnerAmper)
• New technology is making it possible to more accurately track sustainability efforts. (Danielle Barrs – EisnerAmper)
• Comcast said employees have to come back three days per week by September. Some other larger companies are also using them as a benchmark and they were probably getting some pressure from the city. (Joseph Viturello – PernaFrederick Commercial Real Estate)