Sustainability Risk Intelligence â Assessing - The Institute of Internal ...

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FrameworksFinancial Assessment FrameworksESG performance measures are viewed as leading indicators of long-term financialperformance and potential sources of risk and/or value creation. No judgments made on acompany’s intrinsic ethical worth.Institutional investors use analytical models that integrate environmental, social andgovernance (ESG) criteria into the investment analysis and seek to balance the level ofESG-driven risk (e.g., reputational, supply chain, geo-political, legal, and regulatory risk)and management’s ability to manage such risks.Non-Financial Industry Assessment FrameworksVoluntary sustainability assessment frameworks are developed by the private, public, andNGO sectors to promote certain corporate behaviors relevant to ESG issues. Theytypically apply to all organizations in all industries and measure adherence to standardsand performance frameworks, but are not risk based assessments.Sustainability assessment criteria may be based upon principles, standards, and metricsestablished by the GRI, the U.N. Global Compact (UNGC), the International Organizationfor Standardization (ISO), and other standard-setting organizations.
Financial Frameworks – IndexesThe quality of a company's strategy and it’s ability to manage opportunities andrisks related to ESG activities are increasingly being quantified by rating agencies.The following is an example of commonly known indexes:- Dow Jones Sustainability Indexes (DJSI)- Carbon Disclosure Leadership Index (CDLI)- Carbon Performance Leadership Index (CPLI)- FTSE4Good Index Series- NASDAQ OMX CRD Global Sustainability 50 Index- S&P U.S. Carbon Efficient Index* There are currently over 100 sustainability ratings in existence, compared to approximately 20 in 2000.
Page 1 and 2: Sustainability RiskIntelligence - A
Page 3 and 4: Defining Sustainability
Page 5 and 6: What’s Driving Sustainability?Pop
Page 7: Common Standards andFrameworks
Page 11 and 12: Identifying SustainabilityRisks
Page 13 and 14: Sustainability Governance - Risk Ow
Page 15 and 16: Regulatory Drivers in the United St
Page 17 and 18: Potential Sustainability RisksOrgan
Page 19 and 20: Improved Board Risk OversightUsing
Page 21 and 22: Internal Audit Plan - Assuring ESG
Page 23 and 24: Question and AnswerSession

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