Ep. 52: Mike Wallace - ESG Related Metrics for Accounting and Finance Professionals

Mike Wallace, Partner at ERM: Environmental Resources Management,
joins Count Me In to talk about all things relating to ESG. Mike
previously spoke with IMA around the Global Reporting Initiative
(GRI) in 2011 and was able to provide insight into some changes
that relate to ESG data and integrated reporting. With so much
data now available, businesses and investors are very interested
in particular metrics that represent an aptitude for managing
their money and their firms responsibly. Mike is an
internationally recognized expert in sustainability, ESG, and
human capital, and brings this global knowledge to IMA once again
to provide advice and insight into the development and
implementation of sustainability. He has helped launch a range of
sustainability programs inside existing organizations, helped
create new initiatives, and helped organizations expand into new
markets and, in this episode, he speaks specifically to those in
accounting and finance of small and medium sized businesses.
Listen now to hear about how your business can measure its
reporting and performance with all the tools and resources
available in today's industry!


Contact Mike:
https://www.linkedin.com/in/mikewallace/


Mike's Recommended Resources:


https://www.gmsustainability.com/gri.html 

https://www.erm.com/




FULL EPISODE TRANSCRIPT
Mitch: (00:05)


Thanks for coming back to Count Me In, IMA's podcast about all
things affecting the accounting and finance world. This is Mitch
Roshong and I'll be bringing you to episode 52 of our series. My
cohost Adam Larson, had a great conversation about various
reporting expectations with Mike Wallace. Mike is partner at erm
environmental resources management and is an internationally
recognized expert in sustainability, ESG and human capital. He
explains the recent changes since the global reporting
initiative, measuring data for the expectations of different
sectors and all things accounting and finance professionals
should pay attention to regarding ESG. Keep listening to hear
about how you can measure your company's reporting and
performance with all the tools and resources available. 


 


Adam: (00:55)


So we first met, uh, almost a decade ago when you were working
for the GRI or the global reporting initiative and a lot's
happened since then. And can you let us know what changes you've
seen most since then? 


 


Mike: (01:08)


Yeah, sure. The I mean I think, you know, the GRI is an
interesting one where we met because the GRI itself is an entity
but also the world's leading provider of our sustainability
reporting framework, which has now become a standard. But that
year I was created literally almost 20 years ago and was
developed by a group of stakeholders that got together and said,
you know, it's really fantastic what all these companies are
doing about their environmental reporting and voluntary
sustainability reporting, but they're not doing it in a very
standardized manner. Let's create a framework by which companies
can, how used to guide how they disclose this type of
information. And that was the birth of the GRI literally 20 years
ago. At about the same time a similar group of companies and
stakeholders got together and they were talking about of all
things greenhouse gas emissions disclosure and how those
disclosures weren't consistent either. And that was the beginning
of the greenhouse gas protocol. So today the GRI is the most
widely used reporting framework out there. If you Google any
company and and the word GRI after it, you're very likely to find
it. The GRI report for the company so you know that they've done
it according to a recognized global. My standard and the
greenhouse gas protocol underlies all of the ways that we measure
and manage and disclose carbon emissions today. So it feels like
there's a sudden flood of all these things but it's actually been
growing for the last, you know, 20 years or so. Probably the
biggest things that have happened to the most significant changes
that more and more people have grabbed onto the GRI's approach
and enhanced it and tweaked it in ways to help focus it into
certain areas or directions. For instance, the CDP is very
focused on greenhouse gas disclosures and it's backed up by lot
of investors who were saying, we want this type of information.
There is, there are things that are specific to health and safety
and how you treat your people or your human capital one in
particular. It's called the workforce disclosure initiative and
they've taken the ball and run with it around disclosures that
companies should make about how they treat their people. And that
can be gender and diversity issues or it could be right down to
health and safety policy. And probably the biggest, most
influential is, is the TCFD cause it's, it's the biggest one out
there with the most players around it. And in essence the entire
global market. The financial community, it's gotten together
under this entity called the task force on climate related
financial disclosures. Long name, but just think about it from
the name of the standpoint of TCFD. You look up the signatories
on that and you're going to see stock exchanges, the major rating
agencies, insurance companies, lenders, asset management firms,
commercial banks, private banks. And you'll see a lot of
companies names on it and essence. They all got together and said
to each other through this platform, the TCFD, we've got some
issues here related to climate change risk and we all want to do
business together. But it's in all of our best interest. If we
figure out how we as individual companies and within our
industries should measure, manage and report on the risks we
face. I want to list, you says stock exchange, who's part of
TCFD? But I want to know that you're going to be around for the
future. I want to ensure you says insurance company, but I want
to see your TCFD disclosures. I want to rate you says one of the
ratings firms, but I want to see your TCFD disclosures and the
companies are turning around and doing this because they want
that finance financing. They want those business partners and
they realize that these risks are true and real to their
business. That's probably the biggest thing I've seen in the last
decades, the TCFD emergence. But then this week we just last week
we just had Davos and the world economic forum throughout all
sorts of new news for us to digest. And yeah, it might feel
overwhelming for companies, but it's actually pretty consistent
with the pattern that we've been monitoring for the last 20
years. 


 


Adam: (05:09)


So thanks for those points, Mike. One of the things we noticed
that um, black rock released their letter in January. You know,
how was this shaking out in the marketplace? 


 


Mike: (05:21)


Yeah. It's interesting, Adam, because we've seen the letter come
out for the last few years from Larry think and it's increasingly
evolve to include more and more discussion about environmental,
social and governance topics. And it's just put yourself in the
driver's seat. There. World's largest asset manager. They have a
lot of customers, asset owners like the big public pension funds
and sov...