S&P Global Inc. (SPGI) Earnings Call Transcript & Summary

Hello and welcome, everyone, to today's webinar. My name is Lindsey Hall, and I am Head of Thought Leadership at S&P Global Sustainable1. Today, it's my pleasure to moderate this webinar titled Beyond ESG: From Climate Disclosure to Action. Today's webinar is part of a series titled Beyond ESG that take conversations beyond the traditional ESG topics. And we recognize that this topic today is of great interest to you, and we want this to be an interactive session. So I encourage you to submit questions for our panel. [Operator Instructions] Please do take time at the end of the panel today to fill out our short survey. We really value your insight. And in addition, you can find any of the reports that we talk about in the resource widget. The webinar today is being recorded, and an on-demand version will be available shortly after we conclude. [Operator Instructions] And so now it's my pleasure to introduce today's panel. We're joined by Steven Bullock, who is Managing Director and Global Head of ESG, Innovation and Solutions at S&P Global Sustainable1; Alyson Genovese, who is Senior Director and Global Head of Corporate Responsibility for S&P Global; Roman Kramarchuk, Head of Future Energy Analytics at S&P Global Platts; and Divya Mankikar, who is Global Head of ESG Market Engagement for S&P Global Sustainable1. So we've got a lot to cover today as we talk about this shifting landscape for 2022 when it comes to climate to net zero, to nature, biodiversity and a whole range of ESG issues. And since we have a lot to cover, I'm going to dive right in. I think a useful starting point will be to hear the country-level perspective.

So Roman, I'm going to start by turning to you to ask what data and milestones are needed to strengthen climate disclosure in 2022 from a country level perspective?

Sure thing, Lindsey. And if we can turn to the first slide because what I wanted to show on that first slide is really our reference case modeling results for CO2 combustion emissions from our future energy team. And what this really shows is a plateauing, a peak and a slow decline. But what's obvious is if you look at where the star is and where a 2-degree scenario is, we're really nowhere close to where we need. So we're actually expecting that CO2 emissions from energy combustion are going to increase by 2.5% in 2022 to a new record level. So 2022 is going to be record high. And then we're going to see additional increases after that as some economies recover and more fully while others push for growth. So when we look at our global integrated energy model, this is 143 countries, 11 end-use sectors, 30 different commodities, we can see that -- according to our reference case, we can see global power emissions -- total global power emissions and total global auto emissions can go to 0 and that still doesn't get us to where we need to get to on a 2 degree. What this really highlights is that a focus on just power on renewables and a focus on just EVs is not going to address the harder abate sectors if you need to get to where you need to get to. And this is all happening despite the focus on emissions reductions and the lengthening list of countries that have made net zero targets. And that's where this next slide comes in, if we can get -- move to that. What I wanted to highlight here, we have a list of -- we have a net zero tracker where we take a look at the countries that have made announcements. We take a look at the credibility of their announcements, and we see how far what -- our reference case deviates from that position. What you can see here is a good portion of the globe is actually covered with net zero obligations. We estimate 79 countries making up 84% of global CO2 emissions and 86% of global energy use have taken at least the threshold that we've identified as having made some level of net zero commitments. Now there is a gradation of what that means. And as you can see here in our shading, we've made the distinction between countries that have essentially talked about putting in net zero targets, have made some sort of discussion around it. Others have put it into their policy, but the most strict and the most binding sort of commitment is one of putting it into law. Now even that is -- laws can always be changed, but at least we're taking -- we're looking at those levels of gradation, we're looking at those levels of commitment. And if there's just a mention, then -- it's not even on this chart, but proposals and everything more serious is on this chart. And if we can go to the next slide. And I think what -- as part of our analysis, what we try to look at is how close are countries actually getting to achieve net zero. And in this construct, at least for this particular chart, we're thinking about net zero CO2 combustion emissions, recognizing that outside of the CO2 energy sector, there is opportunity for reductions, there's opportunity for actually carbon capture, there's opportunities for nature-based solutions. But in this case, we kind of went and we're highlighting a few of our countries. I mentioned that we have 143 of these, and we've looked at what -- how -- what is the progress these countries are making in terms of CO2 emission reductions from current levels in the -- in our reference case, what is the likelihood of their reductions relative to net zero in a 2-degree scenario, and then the red represents the -- where they need to go to essentially zero out their full CO2 emissions. Now I noted this as a construct. What you can see is that there's a wide range of how countries are faring here. You can see how much we're assuming these countries are going to be achieving what they're planning to achieve just in our reference case. And you can see some countries where there's a lot more work that needs to be done relative to current emissions to get to 2 degrees, to get to net zero. And we have sectoral, et cetera, information on this. The interesting thing and what I want to set up the rest of this conversation for is really, we are seeing shortfalls in government achievement, the -- absent additional plans about how to get from here to there. What those shortfalls in governmental achievement suggest is that's going to place additional focus on the role of the private sector. Now some of what the private sector commits to can actually be aligned with what governments commit to. It can be -- it can cover regulatory obligations or it can cover carbon -- some carbon obligations. But some of what the corporate sector will have to end up doing, particularly if we see these shortfalls, is going to be additional. And this is where it becomes more critical as to how corporations set up and how entities set up their obligations and what is their degree of following through and being transparent around those. So I wanted to set that up as an initial sort of grounding point in terms of where we see our performance in terms of relative to net zero. We are seeing significant shortcomings, and this really does highlight the role that the private sector will need to play. So I can pass that back to you, Lindsey.

Thanks, Roman, for that lay of the land. That's really helpful country-level perspective, which is an important piece of the puzzle, and sets us up nicely to talk about the investor perspective. I'd like to now turn to Steve and Divya to ask what are investors looking for when it comes to climate plans and net zero commitments. Steve, let's start with you.

Yes, sure. Thank you, Lindsey. That's a great question, and I think, yes, follows on very nicely from Roman's comments about the need for greater transparency around the commitments that companies and other organizations are making and how they're talking and communicating about those commitments. So I will start by saying generally speaking that demand from investors for timely, consistent, relevant data on climate-related issues is greater than ever before. And I thought I'd just spend a few moments just talking about the types of things that investors are looking for from companies when it comes to transparency around net zero and climate more broadly. So, I mean, just starting with the basics really. There is an expectation that companies are able to quantify and communicate the progress they're making around quantifying their own greenhouse gas emissions baseline. So their emissions across their operations, supply chains, their products in use and so on and so forth. So the Scope 1, Scope 2, Scope 3 language that we're all familiar with. That's no easy feat. It might be the sort of table stakes, but it's challenging in its own right in the sense that for many organizations, especially those in consumer discretionary sector, for example, a lot of their impact is in the kind of downstream use of products. So companies are working with organizations to help them quantify and get a better understanding of their total kind of value chain carbon impact. And that's obviously the useful starting point and baseline for any kind of report and assessment of climate. What they're also interested in, of course, is the forward-looking elements as well. So how companies are managing -- assessing and managing exposure to things like transition and physical risk. And our data shows, for example, that around about 66% of the largest global companies around the world already have at least one asset at high risk of the physical impacts of climate change now and going out into 2030 and beyond. And these are issues like water stress, wildfire, sea level rising and so on and so forth. So there's an expectation from investors that companies and organizations are starting to think about some of those forward-looking elements. There's also a huge piece around the targets themselves. So what are the targets around net zero? Are they science based? Are they underpinned by the latest climate science? What are the time frames? What scope do they cover? I talked a moment about the importance of a value chain perspective. So do the targets that these organizations are setting speak to those material impacts across the value chain? Also, how are carbon offsets being handled and the timing of those? So those are some of the kind of the foundation elements that -- and targets that investors are looking for from companies. But I think this all wraps up into the way that organizations are communicating about this through transition plans. And this is where it's going from the importance of disclosure to one about action. So companies are now expected to talk about the strategy that they will implement to achieve the goals that they lay out relating to net zero. Is that focus on decarbonization the new ideas? What is the role of offsetting, as I mentioned? What are the cost to achieve? What do their CapEx plans look like? So all of this really is important and, I guess, is a challenge for organizations and thinking about not just the -- about what to report but also how to report and when to do that. And I guess just one -- just to finish on one point and one sort of promising development is the role that the Task Force on Climate-related Financial Disclosures will play in this because that is a framework that's getting a lot of traction in the market around how to report on climate-related issues in their latest guidance. They're now also saying that it's a great place to talk about your transition plans as well. And I think that's promising because it will help organizations and investors who are looking at this information look at it in a consolidated way, in one place, alongside more traditional financial metrics. And we're already seeing from an S&P Global perspective huge growth in the demand for TCFD reporting with companies and other organizations.

Thank you, Steve. Those are great points. And I think it teases up nicely to hear from Divya, who has a really unique perspective on this topic given your previous role at big U.S. asset owner, CalPERS, your current role as Head of ESG Market Engagement here at Sustainable1 and your ongoing involvement in some big investor initiatives related to net zero. What can you tell our audience about what investors are seeking relative to climate and net zero goals?

Thank you, Lindsey. That's a great segue. Thank you, Steve, also for covering the challenges that net zero-committed investors are facing. I think what we have seen just over the past 2 years is a sea change in investors talking about net zero and trying to figure out how to align their portfolios with net zero by 2050. So the umbrella organization, the Global Financial Alliance for Net Zero (sic) [ Glasgow Financial Alliance for Net Zero ], or GFANZ, pulls together these commitments from asset owners, asset managers, banks, insurers. S&P Global is a member of GFANZ. And at this point, we now have about $130 trillion in capital committed to aligning with net zero by 2050. And so what investors and other types of financial institutions are trying to figure out now is how do we make progress on those commitments by 2030 or even intermediate targets. And so what we've seen is commitments from over 450 firms across 45 countries and an initial tranche of those actual commitments coming out from financial institutions, really in the lead-up to COP26 last November. So as an example, and we have many more examples on the net zero page on our website as well, the UN asset owner alliance, which I got to be part of in its first year of existence when I was still at CalPERS. I continue to track their progress. They're making amazing progress. They put out a target-setting protocol that calls for setting targets not just for the portfolio, the overall 2050 commitment but sub-portfolio targets. So equity, fixed income, real estate and then in the future, as methodology support them, other asset classes as well; also, intensity-based targets for individual sectors, those sectors that Roman was mentioning; and targets for financing the transition because we know that climate risk for investors is not just a risk, but it's also an opportunity, it's a massive investment opportunity. And so the UN asset owner alliance is -- actually encourages membership to set targets for financing those solutions. And so just to take one case study of an investor that has publicly disclosed its strategy for meeting its climate ambition and its commitment to the UN asset owner alliance, CDPQ, the Canadian pension fund for -- based in Montreal, Canada, has put out this plan of holding $54 billion in green assets by 2025, towards that point I was making about investing in solutions; achieving a 60% intensity reduction in their portfolio by 2030; and creating a $10 billion transition envelope to decarbonize industrial major emitting sectors. So this is another theme that we're seeing I think just more recently in the past 6 months to a year where investors are talking about not just the carbon footprint of their portfolio and reducing that intensity but also how does that translate into reductions in the real economy. That's really a cutting-edge idea where they're looking not just to reduce emissions in their portfolio but how does that -- how do those financing decisions translate into shifting business models in the real economy. So a lot of exciting developments and creative thinking happening in the financial institution investor space around meeting this climate ambition of aligning with net zero by 2050.

Thanks, Divya. Another thing I wanted to raise is something that just came up later this -- earlier this week. Larry Fink, CEO of BlackRock, the world's largest asset manager, is asking companies to go further than just preparing a climate strategy in his annual letter to corporate executives that was released a few days ago. Fink wrote that he wants companies to set tangible short- and medium-term targets for greenhouse gas emissions reductions. As you all know, these letters often shape the ESG discussion for the year ahead. So I'm wondering how this call for interim goal setting fits with what the panel has been seeing in the market. And Divya, I'll turn this to you.

Yes, I think it was good to see that called out in his letter. It immediately makes me think of Climate Action 100+ because BlackRock is a member of that initiative. And full disclosure, I was a co-founder and key architect of it, so I might be biased in my brain first going to that. But it represents 600 investors with $60 trillion in assets under management. And the goal of Climate Action 100+ is to achieve 3 things. One is exactly as he mentioned in the letter, disclosure in line with the final recommendations of the TCFD Board oversight. So investors want to know that knowing that climate risk and opportunity unfolds over short, medium and long time periods that the Board has oversight. And the third is setting targets, to your question exactly. And what we've seen is of the 161, I believe, companies that Climate Action 100+ engages with, 111 have now set net zero targets, and a subset of those have set short-term targets as well. So I think it really echoes that, of course, BlackRock, the largest institutional investor, is saying this, but it's a chorus of investors globally of all different sizes and types that are really pushing on companies, to Roman's point, putting pressure on companies to set near-term targets. And we are starting to see those arise particularly as methodologies become available but guide them on how to set a near-term science-based target.

And I would just step in just to mention that on the previous slide, it kind of showed the timing of some of the country-level plans. Some of those country-level plans were talking 2050 to 2060, and that goes to the credibility issue of it's -- are the leaders setting these plans, putting in a credible plan on the government level to get to that point. The best example of that we're seeing is the Fit for 55 plan that Europe is trying to put in to clearly lay out a pathway to get to 2030, which is on the way to their European plans and individual country plans to reach their final net zero targets. So there's a wide range of -- there's a wide diversity in that shorter to midterm accountability where I think Fit for 55 in Europe is at the forefront of that. And some of the other countries that have just put out a 2050 or 2060 target, that there's a lot of work to still be done. And that just means more work for the private sector and investors.

Great. Thank you both. And Alyson, I'm so pleased to have you on the panel today, too, and I'd like to bring you into the discussion because your role as Global Head of Corporate Responsibility for S&P Global brings this valuable on-the-ground perspective. And so I'd like to ask, what can you tell us about what you're hearing from investors in your role? What questions do they have when it comes to climate plans and net zero?

Sure. Thanks, Lindsey. So like -- we often talk about the investor. But of course, there's a huge diversity of investors and types of investors that we're engaging with. For those who are not necessarily considered ESG investors or progressive investors, it's great for them. We are hearing more from that kind of population around do we have -- have we committed to net zero, do we have science-based targets. So you could start to see that folks who are not necessarily used to this language and nomenclature are starting to ask questions around our own -- our disclosure as a company, which is great. For those who are more sophisticated, we set our science-based targets and had those approved early in 2021. I think it was January 21. And so for those where they have the data in front of them, we've been reporting on our own emissions for several years. The questions are becoming much more nuanced and candidly much more interesting to have a dialogue around. So questions such as what is our -- what are our short-term plans, how are we engaging. Certainly, for the type of company we are, we're considered a fairly low emitter. That being said, the opportunity to talk through where our missions are coming from, how we're working with our procurement team and the work that the procurement team has been doing over the past couple of years to kind of get us ready for a transition. Our real estate team and so forth has been great, and they've been asking excellent questions around the how and the why and the what strategy, how we're incentivizing it, how we're holding teams accountable, how we're working together internally. And so -- and I think we've had very candid conversations about difficulties and challenges with -- and the successes that we've had. And I think that investors have appreciated the candidness and they've appreciated the kind of glimpse into how it actually moves from announcement into action.

That's great. That's really helpful perspective. And a theme I'm hearing emerged today from Roman's overview of country-level net zero goals, from Steve's overview of TCFD alignment and from Divya's outline of initiatives like GFANZ. The message here seems to be that the ESG dialogue is shifting. Investors wanted to see company plans related -- just to see company plans related to climate or to net zero, and that's definitely still true. But we're now seeing the shift or this focus evolve where investors are also seeking credibility and they want accountability and simply setting these goals alone is not enough. Also, they wanted to ask how their idea fits, yes, with what you've been hearing.

Absolutely. And I think they also -- my role is more operational, around us as a country -- company, excuse me, whereas some of our work on GFANZ and -- is more around our products and services. And so we operate those functions differently, although we've done a lot of work in recent years around making sure that they're seamless. We have the same governance structure for managing net zero on both of those sides. We try to have a lot of alignment. But for anyone who's been inside a large company, that's not always easy. And so -- but I think what we're sharing with investors is how we're maturing in that space and how, from an operational standpoint, I can really learn from our clients in -- on the commercial side and how the commercial side can really learn and that the 2 would not -- will not succeed without the other. And I think -- so we should be doing -- working on -- working together more seamlessly. I know that there was a question on digital technologies. And there are so many types of digital technologies. Just from my own perspective, it's been really helpful for us as our technology has gotten better internally in terms of managing our transition to low emissions through our procurement. We've invested in technologies on our business travel to be able to be much more specific around where the problems are rather than just saying, okay, we need to cut emissions across the board, everyone needs to travel less, that while that is certainly true, what we found is as of -- a company of 22,000 people, there's 300 people that account for the vast majority of our emissions because they're key leaders who are traveling around the world. And so with that additional technology investment, we're able to actually address the problems within what would otherwise be a glossed-over, quick-fix type of policy changes. Similarly in procurement, similarly within our own -- in our own people function. And so it's been very helpful to have these additional digital technologies to do the analytics and to help us focus where the problems really are.

Thanks, Alyson. And the question you're referring to came in through our Q&A widget, which for all of our audience, please do continue to submit questions. But the question is, "How can digital technologies help in achieving net zero? There's growing interest among manufacturing industries in transforming their businesses in line with Industry 4.0." So Alyson, you did a great job addressing that question from the S&P Global perspective. And Roman, I'd like to bring your perspective in here as well in terms of what developments are you seeing in technologies that can help in achieving net zero. Is that something you could speak to?

Yes. I mean I think this is actually something that's interesting because our Head of Platts, Saugata, just put out a podcast around this topic, touching on both the digital technology solutions and some of the more traditional energy-related technology solutions. I think when we talk about accountability, one of the things that we're spending a lot of time on at Platts is to understand the footprints and the carbon intensities of the energy that we use. So that's starting with the fact that we're now offering prices around the carbon intensity of crudes and the extent to which oil can be priced relative to how it's produced upstream. And how it's produced upstream is really a matter of accountability and using technologies around satellites, around understanding footprints, around understanding methane leakage and making sure that's integrated into the decision-making production processes and ultimately the sales and the price -- and the resulting price for these commodities. In a similar way, we -- Platts is also working with methane pricing and basically depending upon the associated emissions with producing natural gas. And we're -- we have similar efforts in line with LNG, with hydrogen, with other standard commodities like aluminum. So what it really is, is basically taking advantage of the fact that what had been initially kind of top-down estimates of a lot of the supply chain emissions are now becoming real time and even -- and very much bottom-up estimates that can actually feed into markets and feed into decision-makers so that as buyers, buyers can discriminate on the basis of the carbon footprint of the products that they buy. So that's the sort of part of the digital answer. And then, of course, there's a lot of technology solutions that are just -- honestly, they're the ones that we had been talking about. Some of them are things like carbon capture. Some of those are things like hydrogen. Some of those are advances in things like our current renewable choices. So I think that's a -- it's a general answer to a specific question but would be happy off-line to discuss more specific applications. And I can also include the link to the podcast that Saugata had put out on this.

That'll be fantastic. Thank you, Roman. We also have a follow-up question from the audience for Alyson, which is, "Specifically, what technologies are you referring to that have aided in your analysis?"

Sure. And I think that I can probably combine it with another question around the big 4 pool as well. So we use several digital technologies. Our -- so for our -- tracking our Scope 1 and our Scope 2 emissions and doing some -- so doing the calculations for our Scope 1 and Scope 2 emissions, we use Envizi. We also use Envizi for Scope 3. But we are not only an owner, we're also a client, if you will. And so we rely on Trucost to do the Scope 3 calculations to move it from the data over into emissions calculations. We also use Trucost in several of our tools to help us do analytics and evaluations. So we use that for our TCFD benchmarking evaluation. And we use -- we so -- are very much a client of our own products. We also have invested in Trust Carbon (sic) [ Carbon Trust ] as a provider for us for our business travel. They've been quite helpful in doing a lot of our analytics on Scope 3 business travel. The question also came in around the big 4 came up with the 22 core metrics and 34 secondary metrics, the stakeholder tool that was developed with the World Economic Forum. And we report using that. We were one of the first companies to report using that in our 2020 report, which is available online or we can post a link. And so whether or not those metrics have been agreed by the industry, I don't think that's the case. However, we are seeing that for us, it was quite straightforward because we were already reporting to GRI and we are already reporting to SASB. And so it was an easy leap for us to start using that framework. We're parts of the conversations around standardization of the different reporting tools that are out there, and we'll continue to play a role at the table to help standardize some of these different reporting frameworks that are out there and which I think several industries, including our own, are really seeking.

Great. Thank you, Alyson. Divya, did you want to jump in here?

I did. Actually, listening to Alyson speak about how we're grappling with our own travel emissions, I had a question for Roman going back to what you were saying earlier. So as we've seen the economy transition, I think historically, it was emissions from electricity generation and power generation that were the highest. And now we are seeing those come down, thanks to cost-competitive renewables and other things. On travel emissions, of course we're doing this webinar from 5 different locations, presenting to an audience that's in so many different locations, whereas maybe before we would have all been traveling to the same central location. Just curious about whether you're seeing a shift in emissions related to travel as people get accustomed to video conferencing and all of that through the anemic but also as the aviation sector has invested in emerging technologies as well.

Yes. I mean honestly, if we look at where the hit -- the COVID-related hits in emissions were most dramatically highlighted, it was in the aviation sector. And discretionary business travel was among the biggest hits within that sector and ones that we believe are going to be slow in -- slower in recovering. So we are still -- we're not back to where we were. We don't expect that to happen for a little while. And then the emissions implications of that are going to be different because you also have newer planes being more efficient, emitting less. So if you're running at lower capacity factors, you're going to be running the more efficient planes. The other big initiative -- because aviation clearly falls under the harder-to-decarbonize sectors, it's -- there's not an easy solution here, that electrification is really not a large-scale solution. So the long-term solutions are really ones of sustainable aviation fuels, which Platts has actually been providing more insight in terms of the pricing around. So sustainable aviation fuels are a key biofuel solution. Now the supply of that is limited and also limited in terms of upstream potential. But we are seeing, both on the government and on an individual company level, commitments to the sustainability of travel being tied to usage of sustainable aviation fuels. And that's something that we've been tracking the cost of because it's clearly more expensive. But if you look at some of the incentive mechanisms that have been put in place, be they around things like the California LCFS and even private sector commitments, those are enough to kind of really jump start some of the supply in this space.

Great. Thanks, Roman and Divya. I wanted to bring Steve's perspective in here to respond to what Alyson was saying about Trucost's tools.

Yes. And thanks, Lindsey. So I just wanted to add a couple of points on that. So Alyson mentioned the tools that S&P Global are using to kind of quantify emissions across different areas of the business. And that is a service that we provide to organizations from within our kind of analytics and solutions business. And we're very much focused on supporting those organizations, and that quantification should not be of the emissions, that kind of baselining, the first step that I mentioned at the -- in my opening remarks, but also how to make that data decision useful. And that means that we're trying to embrace more, I guess, granularity in the types of insights that we can provide and specifically kind of location-specific insights. And it sort of also touches on something that Roman was mentioning around the importance of things like remote sensing and satellite data and all of those kind of things. And right now, when we look at physical risks, for example, we are bringing in very granular datasets on the exposure that companies and their assets have in different locations around the world and, with our recent acquisition of The Climate Service, looking at ways that we can overlay the financial impacts of those types of risks. So this kind of importance of decision-useful metrics is a real focus of innovation for us because we recognize that this helps those organizations be able to kind of connect the dots and be able to communicate and link disclosure to strategy. And I just wanted to, yes, just to kind of add a couple of points there about how that kind of toolkit is evolving.

Thanks, Steve. That's really helpful. And we did get an audience question that I'd like to throw your way, which is, "What are the key aspects to look at in a company to get a sort of initial first idea about how committed it is to ESG or net zero?" Would you be able to provide your perspective on that?

Yes. No, sure. And I'll probably just refer back to some of the comments that I made at the beginning. But I think the first thing to do really is to understand how the company is factoring in and looking at the materiality of different environmental-, social- and governance-related issues, what materiality frameworks are they using to assess and govern those risks. And then, of course, what levels of transparency they have on those issues. Are they reporting on the metrics that matter most? And I think that is a very useful starting point, is understanding that kind of -- that materiality assessment process and the frameworks they're using to report. And then going beyond that, of course, is how they're communicating and describing the plans they have, what targets, of course, and then the plans they have in place to achieve those targets. And transparency around the transition plan is one of those growing but incredibly important areas. And we're seeing more and more companies doing this now in the U.K., where it will start to be mandated, for example. So yes, I would say starting point is to understand the metrics and the materiality process, the targets that they're setting and then how they're communicating about the strategy and plans they have in place to address those risks and opportunities.

I would just add to that. I think you want to look at what they're saying outside of what would be a traditional sustainability context or report to see: Are they including this information in their proxy? Are they including this information in their annual financial report? How is the Board talking about it? Do they have ESG experts on their Board? And what does their leadership team say? Is this a true part of the way that the company sees itself in the future? Or is this a PR or kind of necessary evil that they have to go through? And often, companies will start there and then evolve as they learn. And so -- however, to look at whether or not it's an exercise or whether it's true integration, I always look at the Board level. And I would say the other question, and this was question #19 that came in, so -- is around SMEs or the backbones of economies. And so the -- that's very much top of mind for us. And again, it comes back to leadership to look at -- to making sure we're not separating different issues that we're working on from each other. Our DEI work is very much integrated with our carbon -- with our low-carbon work. And so -- and for instance, in procurement, when we set in place rules, we want to make sure we're not disenfranchising smaller businesses that would not otherwise be able to bid on work for us. We have a growing supplier diversity program, which is focused on SMEs. And we want to make sure that they're -- that we can work with them in -- on both aspects. And so I think that, that's -- at least from our side, most of our SME work is through procurement, and it's very much top of mind and has been really driven from the leadership level all the way down to the operational level.

Thanks, Alyson. I realize we're nearly out of time, but I did want to just bring Divya in on that last question. Divya, in maybe a minute or less, what are the key aspects you look at to get an idea of how committed a company is to ESG or net zero?

Yes. I, think dovetailing with what Alyson was saying, it's built into our approach for ESG measurement within Sustainable1's data and tools, which is to look at the quality of governance of the company and then specifically how the Board and executives have planned for integrating ESG into their business plan. So we look very carefully at addressing exactly that question and not just for a single time period, but we have a look back at historically how has that evolved for the company. It could be how carbon emissions evolved, how has climate strategy evolved but also other governance and social metrics as well. So I think that's really the key question and really the focus of a lot of our research, is identifying which companies are truly walking the walk by doing this deep dive into their planning and then their execution of the plan.

Great. That's fantastic. I think in the last minute here, we can maybe just push out our poll because I am really eager to hear from you, our audience, on this poll question. So if you can bring that up, [ Dylan ]. The question we're asking you to answer is just what challenge is your organization prioritizing in 2022. Is it applying science-based targets to your disclosures? Is it establishing a net zero commitment and target? Is it establishing a positive target within your net zero commitment? Is it a focus on climate resilience? Or is it establishing diversity, equity and inclusion commitments as part of corporate governance? [Voting]

And I just also wanted to thank our panelists today for taking part, sharing your time and expertise. And also, thank you to our audience for being so engaged. We got a lot of great questions, and I know we didn't have time to get to everything. [ Dylan ], can you pull up our results, please? Okay. So an interesting split here, but looks like 1/4 of companies are prioritizing science-based targets, applying those to disclosures. Almost 28% are establishing DE&I commitments, which is great to see and I think would be a great topic for another webinar. Thanks so much for your participation today, everyone, and look forward to continuing the conversation throughout 2022. When we close out the webinar, you'll be routed to our webinar survey form. We would love to hear your feedback, so please take a couple of minutes to complete it. And for anyone who wants to review anything we cover today, this session is recorded, and you'll receive a copy shortly so you can access it on demand at your own convenience. Thanks, everyone.