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

Excellent. Hello, everyone. Thank you very much for joining. And we're just going to wait another minute for people who are joining late. We're at 2 past the hour. The call was -- been start at the hour. If we could wait another minute for those people to connect, and then we can get started. Excellent. I'm going to kick us off. I'm sure that there'll be some joiners that come in now. We've got a good audience with us at the moment. So hello, everyone, and welcome to today's webinar. My name is Michael Salvatico. It's a pleasure to be here. I'm the Head of Asia Pacific and MEA, ESG Solutions with S&P Global Sustainable1. It's my pleasure to be the moderator for today's webinar. We've got an esteemed panel with us. The title of this webinar is ESG Knowledge Series: BRSR and the Future of Reporting in India. We're going to be covering issues like the evolution of regulation in India; going to look at the importance of reporting in a standardized manner; and we're going to talk through some of the drivers in demand for data. Now we recognize that today's topic is of great interest, where -- we want this to be interactive. So you'll see that we encourage you to submit questions. I'm going to change the slide to -- the slide that allows you to see all of the different housekeeping that we have and ways for you to interact with this platform. So on the screen, you'll see that we call out the questions and survey and on-demand replay and what to do if you've got some technical issues. But in essence, what you see at the bottom of your screen is a row of widgets, and those icons allow you to interact with us throughout this session. So please do. I'd like to point out the Q&A widget. That's a very important one, right? Because that's what interaction is about. That allows you to ask questions throughout the session, and we'll be looking at those questions as we go through and answering them. So you can submit those questions to the panelists, and you can specify panelist name, or we can put it to the panelist group. After the webinar, please take the time to fill out our short survey. I'll remind you again afterwards. And look, we really do value your insights and how to do things better. You'll also see the reports, and you can access those through the resource widget. For all of you who want to hear the recording again, it is being recorded, and an on-demand version will be available to you shortly after we conclude. If you encounter any technical issues during this program, please start by refreshing your browser. If the issue persists, use the Q&A widget to contact us, and a member of our technical team will assist you. So without any further ado, I'm going to introduce to you today's panelists. You'll see there a photo of myself. Hopefully, you're looking at the video, too. And you'll also see Joslyn Chittilapally, who is joining us from CRISIL Research, and she's an Associate Director there. And I already know she's got some great insights and views because I've been chatting her in the lead up to this panel. You also have on the call Tianyin Cheng, who's the Senior Director and heading up the Asia Pacific ESG work with the index team, S&P Global Dow Jones Indices. And again, I know that Tianyin has fantastic insights because I've been speaking to her about all of the work that we've done on the index side and how ESG is becoming a more important part of that. And then we have also on the call today, we have Vandana Gaur, who's a Senior Manager in Corporate Analytics with S&P Global Sustainable1. So it's fantastic to have the 3 of you on this panel session today. Thank you very much for joining us.

Let's get straight into the questions. So for starters, it's important to understand what the BRSR is and what it means for corporates in India. So I'm going to turn to Vandana first to give us some insights on that.

Thank you. Thank you, Michael. Good morning, evening and afternoon to everyone. It's a very good question. Let me talk -- before taking about what BRSR exactly is, let me talk about how it has evolved. So as you can see that the sustainability landscape, it has changed a lot. The accountability of the Board as well as the concept of reporting, it has changed. And the regulatory nudge, which actually started the reporting in India, it started with the introduction of National Voluntary Guidelines in 2009. After that, the Companies Act, 2013 came. And after that, the SEBI, it introduced BRR, which is Business Responsibility Reporting. And it mandates the top 100 listed companies by market cap, they have to disclose on the nonfinancial aspects as well. Later in 2015, the coverage was increased to add further like 500 listed companies into the list. And in due course of time, the National Voluntary Guidelines, it has also been replaced by another set of guidelines, which is National Guidelines on Business Responsible Conduct (sic) [ National Guidelines on Responsible Business Conduct ]. So basically, BRSR, the framework for the BRSR, the underlying rule, the base is the second guideline, which was introduced, which is National Guidelines on Responsible Business Conduct. And in last year, in 2019, BRSR was introduced. So BRSR, basically, its Business Responsibility and Sustainability Reporting. And it asks -- it seeks disclosure from 1,000 -- top 1,000 listed companies in terms of market cap. And they are asked to disclose their performance against the 9 guide -- on 9 principles of national guide -- the NGRBCs. This BRSR, basically, the guideline, it has like 2 formats. One is a comprehensive format for the companies who already have some sort of reporting. Then there is also a lighter version, which is for the companies who are small to mid-cap size. And this lighter version is basically on a voluntary basis. But the comprehensive version, it is mandatory, not this year, but going forward from next year, it is going to be mandatory. Then again, the disclosure is on 2 of the categories. One is essential; and again, the second one is leadership. In the essential category, it is basically touching on all the essential key plays, which is very mandatory for all the companies to disclose. In the leadership, there is some optional or there is a flexibility not to disclose, but in India, it is based on explain or comply basis. Like this -- if you're not disclosing, you have to explain why you are not disclosing. And then we talk about how it has changed from BRR to BRSR. So what basically has changed altogether? In BRSR, the scope of reporting, it has expanded a lot. Earlier, BRR, it was a 13-page report, which was touching only on high-level KPIs. But this is again a very elaborate framework, which is data-driven. And it is covering basically all the globally recognized KPIs and which is also locally relevant. So it is touching on all the globally recognized and locally relevant KPIs in terms of disclosure. And in BRSR, there is also an increased focus on the material issues, how the management is responding to the sustainability management responsiveness, and it also focuses on the stakeholder management. So altogether, BRSR is a very comprehensive report than compared to our earlier reports, which were introduced previously. So yes, this is in [ a nutshell ] what BRSR is. And...

That's very helpful.

Yes.

Yes. I was just actually wondering, can I ask a question mid your session? So what's the timing around the BRSR, like the date that you say it's going -- some of it becomes mandatory? What are some of the milestone dates around that regulation?

Yes. So this year, it is going to be all voluntary for top [ 5,000 ] companies to disclose the information, their performance matrices against the 9 guidelines. But going forward from next year, it is going to be mandatory for the top 1,000 companies to disclose the nonfinancial information.

Okay. Okay. And there's already a question from the audience there asking, is BRSR restricted to listed companies only?

For now, it is restricted to the listed companies only, but gradually, we see that the scope is going to increase, and it will cover the small and midsized companies as well.

That's right because you say...

Just to chip in, so...

Yes. You said there -- sorry, Vandana, you said it was like 1,000 companies? So they're the large...

Yes, 1,000. Yes, by market cap.

Joslyn, thank you.

Yes. So one that I mentioned about the small and mid-cap listed companies. But I think the question was for unlisted companies. So if you see the SEBI consultation paper, they do mention that there is a conversation around extending the BRSR to unlisted companies about a certain turnover threshold as well. We do not have much clarity on when that will actually be implemented, but unlisted companies will soon get into the sort of advent of BRSR reporting. It needs voluntarily to start with. And even within unlisted companies, the smaller ones still can voluntarily report against the BRSR with the lighter version, which Vandana report. So there is an opportunity for unlisted companies also.

And I suppose that becomes important when those unlisted companies are debt-issuing companies or when they're in the supply chain of larger listed companies.

Exactly. Some of these unlisted companies are very large debt issuers. And just because they are unlisted doesn't mean that certain ESG disclosures are not relevant to them. Debt holders, bondholders have equal rights for transparent information from these companies as well, especially when they are raising capital from the market. So there's definitely a push for unlisted companies to be included in the BRSR reporting system as well.

Yes, and it's very interesting. And it's interesting the way it's being brought in with the different versions, too. And it looks like Sunil has the same question in the audience. They're asking around there some insights on the difference between the lighter version and the regular one. You touched on some of those differences, Vandana, when you were talking about the 2 versions. Are there any more insights around how -- when you say it's more comprehensive and one lighter that we can share today?

Yes, yes. So the comprehensive version, which is a detailed version, it has like a multiple number of questions. Like it covers all the aspects; whereas in the lighter version, it has only -- it has less amount of questions. And it only touched on the high like aspects or the KPIs or the materialities. So -- and comprehensive version, it is very detailed. So I mean, it is more focused on the companies who are already in the reporting domain. They have already disclosed some of the information. They are building on that. But the lighter version is for the startups or the beginners for -- you start with how it works, and what are the basic information which a company shouldn't disclose.

Does it cover all ESG aspects? Is there a focus on climate change in the reporting?

It covers all the 3, E, S and G, all the 3 aspects.

And are there any insights on whether it also covers the climate change strategies? So I'm thinking climate change strategies, analysis around a carbon pricing risk or scenario analysis around Paris Alignment and physical risk. Are they assessed in that as well in any detail?

So I mean BRSR, basically, it has 3 sections. One is a general disclosure talking about the company's finances and all. Second is the management processes, process in which there is an aspect during the -- how the management is looking at these physical transition risk and carbon pricing and changes and all. But in terms of quantifying, still the BRSR is in a nascent stage, so they have [ made ] a section for quantifying the risk as per se. And then there is, again, a third section, which covers through the company's performance against the 9 principles of NGRBCs. So there are basically 3 sections to the BRSR reporting.

I like that. I think that's really important, and that's because I see that ESG has grown in importance across companies and investors and banks. And so ESG organizations or the departments within organizations who focus on ESG have become more influential. And so being able to communicate how an organization is progressing, it is important to quantify the measures that you're using. And so it's good to see that, that's part of the focus of BRSR, and it's not just a qualitative assessment of what's being done. Now there's a few more questions there, but I'm going to jump into the next topic. We'll come back to the questions on the report. So please do continue to add those. I just want to make sure we get through some of the content here because as well as the reporting and what the reporting means, it's also important to understand why it matters, why does the reporting matter to corporates? And Tianyin, it'd be great to hear from you on this question.

Thanks, Michael, for the question. Hi, everyone. I guess I'm coming in from an international perspective to share some of the high-level observations. Very simple, ESG reporting matters to corporates because ESG issues matter to investors, issuers, insurers, lenders, regulators, right, as a whole ecosystem. We know like essentially, there are like important macro trends going on, like increasingly huge population changes and a significant natural resource implication of that, climate change. It's becoming very clear, these things have implication to risk and return as well as they have -- they lead to questions to valuations and how to think about the companies that you have invested, you have land or you have right insured on. These are complex topics and have potential to be difficult to model, something that the financial sector may not be able to address very easily because they are not traditional to financial industry. I just want to point out that ESG issues meant to be financially material. So the idea is really to disclose on factors in environment, social and governance that have or will have significant impact on company's operations, cost of capital, future revenue and so on. I'll take an example, like in E, financially material factor include physical risk. These are things like sea level rise or hurricanes, droughts as well as transition risks like carbon tax and other climate-related policies, technological innovation that, for example, may help to make renewables more profitable even without government subsidy. So we also need to realize one more thing is that ESG issues have key implications on investor flow, the asset flow. Again, in the E example, investor flow out of carbon-intensive companies, this scenario will have a significant impact on energy companies in your portfolio, right, driven by selling pressure in the short term and also a high -- a rising cost of capital in the longer term. Even with the war that is going on, the trend will not likely to change. And we -- on a broader sort of scheme, we have started to see this fundamental of reallocation of capital happening globally. If you look at the global ESG ETF asset, it has passed USD 400 billion by the end of last year. And you can see a very strong and accelerated growth over the past 5 years. AUM essentially 4x -- achieved 4x in the past 2 years, a very short period of time. So definitely, ESG is going to be more and more mainstream driven by all these megatrends. And that is why corporates need to really measure, understand and communicate their ESG performance through reporting and also set goals, manage the changes more effectively, so that they can meet the requirements, current and future requirements from their stakeholders, right? This is everyone, investors, issuers, insurers, lenders, regulators. So I hope that summary helps to give some guidance, right, from an international perspective.

Yes, it definitely does, Tianyin. That was quite an impressive amount there. Can you just say that again? So in terms of the reallocation of capital, which investment or index was the $400 billion in achieving 4x in the past 2 years?

This is the total ETF AUM that is tracking ESG indices. And I'm quoting like $400 billion in U.S. dollar term as of end of 2021. I want to say this only captured a very tiny picture of the whole thing because ETF asset is more transparent, and everyone can see the AUM amount from issuer's website. But it's very tiny. And -- but given it's transparent, I'm quoting this. Hopefully, this gives you an indication of the trend because the trend is growth of more than 100% in the past 2 years.

Yes, definitely. It's really impressive and shows the momentum behind ESG and sustainability and very strong momentum. We see that across multiple stakeholders. You're talking about investors there. And one of the reports that I participated in last year in authoring was for the investor group on climate change, which looked at disclosure and mandatory disclosure and the reasons for mandatory disclosure. And there were 3 benefits highlighted for corporates to disclose. That was access to markets, access to capital and longer-term sustainable performance. So those things are definitely being mentioned in these reports. It's an industry group, and the report's called Confusion to Clarity. So I encourage everyone to have a look at that and look at IGCC as a group that S&P Global is a member of as well. And there's another aspect there to the work that you do, Tianyin, and disclosure. And I find this interesting because as we look to improve the understanding that stakeholders have, in particular, investors have the company's exposure. We're looking to encourage more disclosure, and there's an index that you're involved in that encourages disclosure as well. Could you talk more about that?

Yes, absolutely. So Michael, I believe you're talking about that gigantic GPIF mandate. So this is the largest pension fund globally, Japan's government pension investment fund. Since they joined UNPRI in about 2017, they have been continuously issuing ESG mandates. And one of the mandate is done together with S&P Dow Jones Indices, tracking to S&P carbon-efficient indices. The AUM is huge, JPY 4.4 trillion as of March 2020, and it's been growing. So huge mandates, and it shows the commitment of GPIF to do more ESG. As a universal asset owner, GPIF want to encourage company to do better in terms of carbon efficiency. They also want to make sure every company is proactively disclosing their carbon. As a result of that, the index design want to reflect these objectives, right? So we -- in the index design aim to overweight company that, number one, have a low carbon intensity; number 2 is they do have sufficient disclosure. And I kind of think it's interesting because that I can call them a number to bring things to real life to you guys because in the mandate, there are about 150 Indian companies eligible to be index constituents of the index. But only half of them have sufficient carbon disclosure, Scope 1 and Scope 2 emissions disclosure. And therefore, only -- at least half of the company has to be underweighted simply because they haven't disclosed enough even though they may have been doing well in terms of their carbon emissions. So very important because as global asset owner moving along to show their commitment to ESG, to climate transition, you will see more investors expressing their view through encouraging company to do more ESG disclosure and encourage companies to do better in terms of ESG performance, yes.

Wow. Wow. Thank you, Tianyin. That's really interesting that you bring in the India focus as well. And I'm thinking there's probably a few companies on this call that are wondering about the potential capital that they're missing out on because they're not disclosing and could potentially have been in this index. And certainly, if I was the CEO or the CFO of one of those companies, I'd be thinking about the impact of that additional capital on my company. So there's definitely a strong reason to think about disclosing more information. I'm going to bring the conversation to Joslyn. Joslyn, we heard from you before but only briefly. So -- and I also want to connect back to the questions that we're getting from the audience, which are focusing very much on the BRSR. So let's come back to that. And Joslyn, can you tell us more about what the BRSR means for that top 1,000 companies in India? And what are the business advantages of the BRSR?

So thanks, Michael. So I think in terms of what it means really for corporates is that, a, there is much more expectations with regards to disclosures. The BRR evolution, the evolution of the BRR from the BRSR means more granular data, more information to be tapped by companies. So companies, as a first step, really need to see what the BRSR expects off of them and actually see, are they even tracking it? They have a 1-year voluntary sort of period to sort of do that tracking and ensuring that they have all the mechanisms to actually start mandatory reporting on it from the next fiscal. So I think that is one of the biggest challenges, especially for companies who -- the top 200, top 300 companies have generally been good reporters in the ESG sustainability space. But what about the remaining 700, who are now kind of mandated to report on this? So there is a lot of sort of capacity building that they need to do, hiring of ESG resources that they need to do, ensuring that they are actually tracking according to their entire reporting boundary because one of the things that CRISIL has seen when we were scoring Indian companies is that the reporting boundary is very limited to sort certain factories in the company or certain divisions within that entire conglomerate. So because, obviously, these are quite onerous in -- for companies, especially the smaller companies do not have the resources. So I think that, I think for the smaller companies, the companies that have not really been initiated into ESG reporting is going to be a sort of a learning or steep learning curve kind of for them. But in terms of advantages from the investor perspective with the BRSR coming in, and I think I agree with what Tianyin said is that the access to capital, the -- because the BRSR means more ESG information for investors. Because what do investors need? They need more coverage, and they need more data. And when we say coverage, it's become 500 to 1,000 companies. So there is increasing coverage of Indian companies with data that is standardized as much as possible. To a large extent now, the BRSR standardizes the data, makes the data more comparable, which means that investors can use this data in their decision-making processes. These are important data that they will use in their credit committees and their lending committees, et cetera. So that is one of the advantages that investors will have. And the second thing what investors can take from the BRSR is their own reporting because a lot of investors, especially as you know, the ESG fund market in India has grown exponentially. Now there will be a lot of expectations from the ESG funds to report on their impact, and how do they report on their impact in terms of ESG is to ensure that the investee companies have the right kind of disclosure. So that the investee companies are reporting on carbon emissions, water consumption, which indirectly they can report as per their portfolio. So I think the BRSR is going to be extremely useful for the investors and the lenders, especially investors and lenders who are tracking these factors into their ESG fund decision-making as well as in their mainstream decision-making. So I think better data, more coverage is kind of the summary of the advantages for this.

I like that, better data, more coverage, very good. And I like the fact that you bring up that those reporting boundaries were limited. And when it comes to ESG, it's no -- there's no use in reporting what you think is good and not reporting on all parts of your business. And the reason I say that, that's not a strategy that's helpful is because what you report on is being analyzed. And there's quality controls and assessments being done by organizations like us. So S&P Global has been running the environmental data set for 20 years. And that environmental data set allows us to have a really good view of what an organization's environmental metrics, including carbon emissions are likely to be, given the size of the company. And so we find that 1 in 3 companies that report, we assess and find that we need to make corrections to that environmental data. So there's definitely a focus on reporting across your entire business. And even if you feel that, that's going to put you in a light that's maybe not ideal, it's better to do that upfront because one of the factors that investors look at is the improvement or the delta in those ESG metrics, so you benefit from that in the future years. And also just on that front, one of the things that I often think about is if you don't report, it's not that you're not being analyzed because it can be modeled. And it's much better as a company if you're telling your own story. If you're not telling your story, somebody else will be telling it for you, and that somebody else could be S&P Global. And in fact, that's my long way of coming back to a segue to you, Vandana, because we've talked a lot about data. We've talked a lot about coverage, and it'd be really good if you could provide some more insights on the data and coverage from an S1 lens, S1 being Sustainable1, I should say. I was a bit of throwing in abbreviations there that we haven't translated.

So no, excellent. Excellent. So yes, at S1, we interact very frequently with the investors as well as the nonfinancial corporates. So from investors, what I hear a lot is that they are not having access to the data, which is clear, consistent and comparable to for a better decision-making. And when we talk to the corporates, they are still unsure of what to report. So this like the entire problem, this is addressed by the introduction of BRSR to some extent. And BRSR, basically, it is a data-driven report. So investors will have now access to a clear, consistent and comparable data; whereas corporates, they can actually understand what they need to disclose and what they not -- they do not need to disclose. And when we are talking on the aspect of data per se, the main challenge which we see from the corporate end is that there are certain data gaps. So as Joslyn already mentioned, that top 200 to 300 companies, they are very good in disclosing that information. They have -- will -- a good mechanism in place to capture the data, but there are other companies as well who lack this expertise. Then again, there comes a challenge of data gap. And here, companies like S1, who already have a repository of data, which we have modeled for some companies who have not disclosed, so we are able to fill those data gaps. Apart from this, BRSR also, it also mandate the companies to go beyond their operational control. They go beyond, look, they should report on their upstream and downstream supply chain as well. Again, the key challenge comes because when we talk about the supply chain, not all the suppliers, they are like large market cap companies. Most of the suppliers, they are small to midsized companies who don't have expertise to calculate their emissions. They don't know what type of information they should gather to convert it into GHG emissions or any other standard KPIs. Again, here, companies like us who provide handholding to such small companies, and if they are not able to disclose the information or if they are -- they don't have expertise to convert their electricity consumption or energy consumption to the GHG emissions, we approach it in a different way. We use the sector intensity. We -- think of another or multiple other different ways to how to model the information to -- as I attribute emissions to those small companies, and you come up with a standard set of KPIs, which is accessible to the investors for informed decision-making. So yes, I mean, this is the real role of data in the entire reporting process and how the companies are facing the challenge of not having the data, adequate data basically.

Thank you, Vandana. Tianyin, do you have anything to add to that from an international perspective?

Well, I guess, we definitely need data, good data, comparable data if we want to create a valid ESG product such as an ESG index. I just want to share that from -- for most developed markets, data availability is not really an issue anymore. But for emerging countries, frontier countries, disclosure may still be a bit patchy sometimes. But really, the biggest challenge is the standardization of reporting when it comes to constructing ESG products. We know that traditional financial reports are quite standard. They are like well-established accounting rules, regulations, IFRS, GAAP. And they allow like international companies to be able to compare to each other. ESG reporting, on the other hand, still lack this data standardization internationally. Hence, it may still be difficult to compare data and how things are reported from one company to another. This is an ever-evolving area, and EU has been in the forefront of putting out like different guidance on disclosure, putting things into regulations. We have things about like international standards as well, right, TCFD, ISSB, GRI and so on. These are like a baseline disclosure standards. And many of the Asian countries are also like working out their own standards definitely. So definitely a lot more happening, a lot more efforts need to be done to allow better disclosure and enhance product creation using this data. And I guess the final point is from an index creation point of view and also like ESG product creation point of view, higher disclosure and more company disclosure will definitely allow like various domestic ESG indices to be created in India to address various market segments. You can have things like small cap India ESG product. It's not possible previously, or maybe India technology innovation theme ESG index. So these are things that demanded by international investors. And if they have the ESG value alignment need to achieve, the data availability is going to be key to allow such mandate to happen. And in addition, with higher alignment with the international standards, many of the standards in reporting, Indian company may also increase their chances to get included into international ESG indices. And I guess the GPIF mandate was a great example showing that.

Yes, definitely. And there's certainly a number of ways to think about data and reporting, too. So one of those ways is to use the assessment that S&P Global provides, which is the corporate sustainability assessment. And that's a free assessment for companies that are in the S&P BMI, which is the Broad Market Index. And -- but more than just an assessment, it's actually a tool that helps improve the strategic sustainability focus of the corporate. And so it's helping Indian companies understand what a global investor is looking to assess the information that they're looking to see. And more than just looking at reported data, the CSA offers the opportunity to provide insights to the organization on questions and concerns that investors have, which the company might not yet have thought to disclose. So it really is providing some good insights there. And it's a very proactive way for a company to be involved in ESG disclosure because our CSA team, the Corporate Sustainability Assessment team, works with that organization. So that's something to put on your radar. And another way to entering data for large companies but also small companies and companies within supply chain, we kind of mentioned a little bit about supply chain, is through the ESG Repository. And the ESG Repository is exactly that. It's a tool that the company can enter in its data into. And then the advantages of entering the data into that tool is that it has a set number of preset regulatory reports. Now I'm going to say that we're looking at more and more reports all the time. There's already 40 different reports, and there are some reports that we comply with. And I'm sure that BRSR is one of those that's on the road map to include as that becomes firmer around the metrics and the framework to report on. And so that might answer some of the questions that we're seeing on the chat. And I'm kind of going to go across to some of those questions as well, which are looking, again, at the BRSR and looking at it through the lens of those international reporting standards that global investors are taking a view on. So I want to come to the panel and ask, are there insights on how the BRSR compares with some of the international standards that we're seeing across the world?

Vandana, are you responding?

Yes, yes, I am. So yes, when we talk about the global perspective, BRSR, it is in its nascent stage. It is comparable to like gradually in the future, there will be a convergence towards a global reporting framework. When we talk about standard global reporting framework, which is in use like right now, the TCFD, which is very relevant and most of the companies are adhering to it, BRSR is like a step towards that, wherein it is like disclosing multiple aspects or the key globally standard KPIs. But again, it again lacks on certain aspects like quantification of the risks and opportunities. So it is a step towards the global reporting framework, but still, there is like a point where it has to reach.

Yes, there's still a bit of work there to do. Some of these questions are very specific around BRSR. Certainly getting some questions on the -- is BRSR sector-agnostic as of now? Is there any chance for it to be more sectorial going forward? These are -- I suppose these are questions that are looking at that consultation from the BRSR perspective. So if we have views on that, that would be great. And another question here, which popped up, was about UNPRI and the UNPRI in India. So you mentioned UNPRI, Tianyin. Is -- are we seeing a greater adoption? As we mentioned before, there are certainly more fund managers popping up in India. They are all realizing the benefit of the UNPRI. For those who aren't familiar with the UNPRI, it's a set of 6 principles that focuses on the integration or incorporation of ESG as an assessment, so integration in the investment process, the promotion of that, the reporting of that and some of those 6 principles. And now that initiative has many thousands of signatories and covering a very significant market cap of the global investments. Are there any insights on the UNPRI in India? Yes?

I guess not really at the moment, but I really wanted to point out that UNPRI is an international organization. And as Michael mentioned, there are like signatories of like 7,000 globally and with collective AUM, I can't remember, $100 billion, something like that or even more, really can't remember, sorry, but it's significant. The key message is when these international asset owners, when they become a signatory of UNPRI and start to think about implication to their portfolio, there is a downstream implication to India companies and Indian asset managers, right? Because Indian asset manager will need to satisfy these requirements from their international clients. So it's going to definitely expedite the integration of ESG in India locally when there is this such a big trend going on internationally. And therefore, it's just a matter of time when the adoption becomes greater and more consistent in -- with international standard, even domestically in India. And this is something we have seen in many other Asian countries. Even emerging countries in North Asia, they started with very small number of UNPRI. It seems to be an obligation to do something when they sign up for that signatory. But once they are signatory, these asset managers start to think about ESG integration and becomes more [indiscernible] scenario in these countries in Asia. So definitely, it's a trend. And therefore, corporates need to be prepared on maybe their asset managers and asset owners internationally will start to ask questions on their ESG performance and disclosure.

Yes, yes. Thank you, Tianyin. So I've got [ another ] where almost 4,000 signatories with $121 trillion.

Thank you.

There are other initiatives as well. So TCFD was more than 2,200 companies last time I looked and following the TCFD framework for reporting on governance strategy, risk management and metrics and targets. And one that should be relevant to all our audience in India is GFANZ, the Global Financial Alliance on Net Zero, which was created at the recent COP, and the support for GFANZ is USD 150 trillion. So a lot of investor capital focused on these issues around sustainability.

Michael, if I may just add on the UNPRI side, I think we are definitely seeing a lot more uptick in the signatory base from India from the asset manager side at least. Few years ago, we might have had like a couple of them. We now have a few more well engaged ones, especially the other asset managers who already have ESG funds. So those are the asset managers who were signed up to the PRI. The other question on sector-agnostic part of the BRSR, yes, currently, the BRSR seems to be very, very sector-agnostic. There are leadership indicators where companies can choose to report on parameters that are specific to their sectors. But I think definitely, in the next years, we will -- I do think that there will be a more sector-specific angle to the BRSR because as Vandana mentioned, a lot of companies actually don't understand the ESG materiality of their sectors or the ESG materiality to the locations that they are operating out of. So while there are frameworks like SASB, et cetera, I think the BRR -- BRSR coming in with a more sector-specific perspective to it will definitely help in assessing companies from a sectoral perspective.

Yes, really good point, really good point. So the ESG issues for companies can be different based on the industries that they're operating in. And so that's something that needs to be taken into account and understanding which are the issues that are important to focus on is not necessarily as straightforward. But there are a set of issues that are common. And for instance, in the CSA, there are 50% of the questions which capture 1,000 data points, which are common across industries. So there is some consistency. I also noticed that, Joslyn, somebody's asking around greenwashing of data in the initial years. And you flagged that for one that you were prepared to answer. It was also looking at how well company's prepared to furnish the data. But what really picked my eye in that question was around greenwashing. Was that something that you noticed as well in that question and thought to answer?

I might have accidentally flagged that, but I'm happy to answer the question. So I think even as CRISIL, like we have now scored about 600 Indian companies. And this greenwashing issue, as you would know, Michael, is an age-old conversation as people from the ESG community have been trying to sort of answer and address and resolve. And especially when you work with data, self-reported data by companies, there is very little you can do to actually kind of sift the truth from the fake stuff, right? So I think one of the things that we want to see more as a scoring agency is more audited data, assured data from third parties because that will lend a lot of credibility to what the companies are reporting. Granted that a lot of the self-reported data is in the public domain, which makes it in a way credible in that sense because it's open through for the public to see and for all stakeholders to see and sort of question. However, I think we are seeing a lot of movement and conversations around credibility of data and the need for assurance of all of this data, which in a way addresses the greenwashing issue.

Yes, a really good point. That's coming up more and more in discussions that I'm having, too, around auditing and assuring ESG data because at the moment, there's pretty much no auditing. Like I said, the auditing that's being done is done by organizations, where they're assessing the reporting against the expected reporting. But that tends to be based on the models that organizations developed. And I'm thinking about the environmental data set that S&P Global has. But yes, more and more discussion about that auditing and insurance at the company level, a bit like financial data is nowadays, right? Once upon a time, the financial data wasn't audited and assured, certainly not the way it is today. So we're coming to the end of this session. There's a lot of questions that I haven't managed to get to. And so I'm sorry about that if we didn't get to your question, and we will try and follow up afterwards. But I'm going to go to our 3 speakers. And I just want to give you the opportunity to think about your last thoughts. And as you do that, definitely if you can, a perspective on the next steps from the topics that we discussed on this call today. And Tianyin, I'm going to go to you first and then Vandana, it would be great to hear from you, and then Joslyn.

Yes. I definitely think that having the data coverage and more standards is very good starting point. What we see internationally is there is a lot of focus nowadays on product labeling because many of the developed markets have done with data availability, but now they are focusing on regulating product labeling. For example, in European Union, we know there is SFDR Article 8 and 9, which set minimum standard for climate benchmark. So if you want to call your index climate or green, you got to satisfy certain criteria. So it's a benchmark regulation and therefore, also help to put more standards into how the fund, right, some ESG funds should be called. And similarly, in the U.S., SEC proposed rules to enhance and standardize climate-related disclosures for investors. So again, for funds raised, they have to call their funds ESG or green if they satisfy certain criteria. These things are really helping to address -- going to help to address greenwashing as a next step. And this is like something that will happen in the future.

Definitely. Thanks, Tianyin. That is so true. And what that says is, hey, guys, if your companies have got international clients, these international clients are looking through a climate or an ESG lens as they look through their supply chains and more and more of my discussions around supply chains. If you're in the supply chains of those companies, then you're going to need to be reporting on this. Vandana?

Yes. So in terms of next step, I would like to cover it from 2 perspectives. First is the corporate perspective, and the second is the regulatory perspective. So when we talk about the corporates, BRSR is basically a stepping stone, which has laid the ground. It has provided a framework, but now it's up to the company to adhere to the basic guidelines and disclose more and more in the future, assess the risk and opportunities and quantify basically all the risks and opportunities and talk about how the management is approaching it. So this will be from the corporate perspective. And then we talk about the regulators. So the BRSR is basically -- it is in a nascent stage. What they need to do from a regulatory perspective is they have to think of converting it into a global framework. They also have to think about how to include the multiple sector-specific guidelines and also to increase the coverage in terms of capturing the small- to medium-sized listed companies as well as the unlisted companies into its [indiscernible] because none of them are -- should be excluded from the reporting framework because even a small-sized company, they will be equally polluting compared to a big corporate. So yes, we should think -- investors should think about increasing the coverage; whereas corporate, for them, it is basically a stepping stone. They need to build on this. So yes, these are the 2.

Yes, definitely I agree. I'm sure there's a lot of people on the call that agreed to it. And Joslyn?

Yes. Just in the interest of time, I'll keep it short. But I think in terms of next steps with regards to the BRSR and what the SEBI is trying to do, and the study has so far done a very great job from transitioning from BRR to BRSR, increasing their coverage, increasing the granularity of data. But I think -- and also aligning it with some of the international frameworks. I think there is a lot of GRI referencing in the framework. There's a lot of SDG mapping to the framework already. So I think going forward, things that we already discussed, sector-specific aspects, assurance, guidance around how do companies assure their data from third-party providers, how can you incentivize companies also to start reporting. Mandates really reporting is one thing, but what is the quality of the data that these companies are reporting? Are they actually just qualitative stuff? Are they just boilerplate statements? How do you kind of differentiate between the standard statements with the action-oriented statement? So those kind of things and also issues around reporting boundaries that we mentioned. Can the regulator have some sort of a mandate that your reporting boundaries needs to be 100%? If not, it needs to be explicitly specified why it was not tracked. So those kind of issues to kind of make it much more decision useful for the -- in financial institution community as well as for corporates who are raising capital. I think those will be, I think, some of the next steps that we are sort of looking forward to in the BRSR.

Excellent. Thank you very much, Joslyn. Thank you, Vandana, and thank you, Tianyin. That was fantastic and great insights, and I'm sure the audience thanks you as well. I thank the audience. It's been great to have your questions. As I say, we'll try and follow up on those questions that we didn't answer. Please use that Contact Us widget, and we'll be glad to assist in a more direct way. I'm really pleased to have your questions through that as well. And for those who want to review anything we've covered, as I said, this session has been recorded. And you will receive a copy shortly, and so you can access it on demand at your own convenience. And don't forget, guys, that survey. When we close out the webinar, you will be routed to our webinar survey form, and we would love to hear your feedback because it's so important to us to make sure that we're hitting the mark on the questions and hitting the content that you want to hear in this ESG Knowledge Series. So thank you all very much. Great rest of your day, and I look forward to potentially me seeing you on the next ESG Knowledge Series. Thank you very much. Thank you, speakers.

Thank you.

Thank you. Have a nice day.

Thank you.

Bye.