Are you an ANDE member interested in helping SGBs navigate environmental, social, and governance (ESG) measurement and standards? We are putting out a call for our first working group on this topic!
Call for Working Group
With support from the Tipping Point Fund on Impact Investing (TPF), ANDE is convening a working group around how ESG measurement and standards impact SGBs in developing economies.
At ANDE’s major convenings over the past two years, members have been raising concerns about how shifting ESG reporting standards may be shutting out SGBs in developing economies. The European Union implemented their Corporate Sustainability Reporting Requirements in 2023, mandating that all large and listed companies report according to the European Sustainability Reporting Standards (ESRS), and these standards include regulations for their supply chains. Meanwhile, the Business Development Bank of Canada estimates that 91 percent of major corporate buyers will require ESG standards disclosure from their suppliers in 2024. This shift toward greater accountability affects not only corporations but also investors. The UK’s updated Stewardship Code, for example, requires investors to “comply or explain” regarding the environmental considerations of their investments.
The cost and administrative burden of tracking, reporting, and complying with these standards is increasingly being shifted onto smaller organizations within value chains. SGBs have fewer resources than large corporations, and as a result, may be falling out of corporate supply chains. A 2020 study found that roughly half of investors and firms agreed that there is a general understanding of ESG but a lack of knowledge regarding how to measure it. This measurement constraint is especially true for small companies (with fewer than 250 employees).
Against this context, ANDE is convening a working group of SGBs, entrepreneur support organizations (ESOs), and investors that have experience interacting with corporate supply chains to understand the challenges – and potential solutions – regarding compliance with reporting requirements, either through ISSB standards, ESG ratings, or other corporate standards. The output of the working group would be a set of metrics guidance, with the goal of providing SGBs with the tools to navigate the often opaque world of ESG ratings and measurement.