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What if ESG disclosures become standardized? intro copy
What if ESG disclosures become standardized?
The graphic below details the full set of data metrics and sources used to determine the MSCI ESG Rating of International Paper (NYSE: IP), a US-based producer of paper products. Click on each of the tiles within a given category to view additional details on the raw data underpinning the analysis, as well as the associated scored assessment that feeds directly into the MSCI ESG Rating.
Interactive Assets
Company-reported ESG information
Information from other sources
Company characteristics
Most standardized
Least standardized
Voluntary Corporate Disclosure Aligned to ESG Reporting Frameworks
This category of data used in the MSCI ESG Ratings model includes data disclosed by the company that is aligned with one of the four major corporate sustainability disclosure frameworks: the Sustainability Accounting Standards Board (SASB), the Global Reporting Initiative (GRI), Task Force on Climate-Related Financial Disclosures (TCFD), and the CDP.
| Recent baseline year | 2010 |
| Highest overall target year | 2020 |
| Highest overall target description | Absolute reduction in global GHG emissions (both Scope 1 and 2) |
| Highest overall target % | 20% |
SASBGRITCFDCDP
| GHG emissions (tCO2e) | Scope 1: 9.1mt |
| GHG emissions (tCO2e) | Scope 2: 3.4mt |
SASBGRITCFDCDP
| Scope of chemicals identified for regulation under the management policy | Small number of high profile chemicals identified |
GRI
| Disclosure of the overall packaging mix by type of material | Partial disclosure |
GRI
| Percentage of water consumption from alternative water sources (i.e. grey water, rainwater, sewage) | 0% |
SASBGRICDP
| Baseline year | 2010 |
| Target year | 2020 |
| Target description | Reduce mill water discharges of oxygen-depleting substances |
| Target reduction % | 15% |
SASBGRITCFDCDP
| Use of cleaner sources of energy | Aggressive efforts |
SASBGRICDP
| Extent of timber and/or paper certification | Between 30%-60% |
SASBCDP
| Water intensity - cubic meters per metric ton of production | 43.6 |
SASBGRITCFDCDP
| Total estimated sales reliant on Timber/Paper (3 year avg, USD Million) | 22,475 |
CDP
| 3 Year Average GHG Emissions Intensity (tCO2e/USD Million Sales) | 603.23 |
| Average Annual % Change in Intensity | -4.97% |
GRICDP
| Energy consumption management and operational efficiency enhancements | Aggressive efforts |
GRICDP
| Other initiatives (e.g. carbon offsets) | Limited efforts/information |
GRICDP
| Programs to reduce water consumption in core operations | Programs to reduce water consumption at selected operations |
SASBGRICDP
| Executive body responsible for company's environmental management strategy and performance | Selected Task Force or Risk Officer |
GRICDP
| Programs to regularly monitor and measure water risk at company's operations | Risk assessment covers all operations |
SASBGRICDP
| Programs to reduce water usage in its supply chain | General statements on water consumption reduction programs at suppliers |
SASBGRICDP
| Water reduction target for supply chain | No value |
SASBGRICDP
| Evidence of ongoing/ future target(s) to reduce water consumption/ withdrawal | Qualitative evidence. |
SASBGRITFCDCDP
| Evidence of Using Alternative Water Sources | Yes |
SASBGRICDP
| Senior Executive or Executive Committee are responsible for water management strategy and performance | Yes |
GRICDP
| CSR or Sustainability Committees are responsible for water management strategy and performance | Yes |
GRICDP
| Responsibility for water management strategy and performance is with non-executive or non-committee level task force | Yes |
GRICDP
| Extent of timber and/or paper traceability to place of origin | More than 60% |
CDP
| Evidence of commitments towards responsible timber and/or paper sourcing | Publicly stated formal policy |
GRICDP
| Extent of timber and/or paper certification against the most stringent criteria | Up to 30% |
SASBCDP
| Future targets for timber and/or paper sourcing | The company has clear measurable targets or all products are already certified or traced |
CDP
| Extent of supply chain initiatives to address impacts of timber and/or paper production | In process of implementing sustainable timber purchasing requirements at core suppliers |
CDP
| Policies to address labor rights in core operations | Evidence of commitment to abide by the ILO's core conventions, UN Global Compact or equivalent |
GRI
| Percentage of workforce covered by trade unions/ collective agreements | 26.42% |
GRI
| Evidence of collective agreements | Yes |
GRI
| Employee stock ownership plan (ESOP) or employee stock purchase plan (ESPP) | Only select number of employees eligible for ESOP and/or ESPP |
GRI
| Variable performance-based component to pay | Selective performance-based incentive pay for non-officer staff |
GRI
| Non-compensation benefits including pension and retirement | Benefits cover selected employees |
GRI
| Support for degree programs or certifications | Program exists but no indication of scope |
GRI
| Leadership training and skills development | Program exists but no indication of scope |
GRI
| Company witnessed strikes / lock-outs in the last three years | No value |
SASB
| Restructuring policies and programs | Evidence of severance pay |
GRI
| Evidence of Anti-Discrimination/ Diversity and Inclusion policy: | Yes |
GRI
| Evidence of child labor provision in the internal policy | Yes |
GRI
| Evidence of forced labor provision in the internal policy | Yes |
GRI
| Evidence of freedom of association provision in the internal policy | Yes |
GRI
Corporate Governance Disclosure
This category of data used in the MSCI ESG Ratings model includes a wide range of governance data derived from annual filings, proxy filings, and annual meeting vote results. This information is standardized, but the availability of each of these sources is determined by local market requirements.
Board Structure
| Director | Anders Gustafsson |
| % of votes against | 31.64% |
| Flag criteria | >10% votes against |
| Flagged metric | Significant Votes Against Directors |
+9 other flagged Board metrics
Pay
| CEO perks & other pay | $212,891 |
| Flag criteria | $150,000 in CEO perks |
| Flagged metric | CEO pay perks & other comp |
+5 other flagged Pay metrics
Accounting
| Asset turnover | 0.682 |
| Industry percentile | 8th |
| Flag criteria | Extreme value in top or bottom 20% |
| Flagged metric | Asset-liability valuation |
+2 other flagged Accounting Risk metrics
Ownership & Control
| % shares needed to call special meeting | 20% |
| Flag criteria | >10% of shares |
| Flagged metric | Shareholder rights to convene meeting |
+6 other flagged Ownership & Control metrics
Regulatory Agency Data
This category of data used in the MSCI ESG Ratings model is derived government data sources, such as the U.S. Environmental Protection Agency, that are not otherwise disclosed in company filings. This information can be used to determine precise locations for geospatial analysis or evaluate company performance on highly regulated issues (ex. product recalls).
Facility Greenhouse Gas Emissions
| Mansfield Mill â Louisiana, US | 519,017 tCO2 |
| Valliant Mill â Oklahoma, US | 339,671 tCO2 |
| Savannah Mill â Georgia, US | 337,898 tCO2 |
| Riverdale Mill â Alabama, US | 337,123 tCO2 |
19 other facilities with reported GHG emissions
Events Data
This category of data used in the MSCI ESG Ratings model is derived from media and government data sources to indicate potential controversies.
This includes text from thousands of global media sources, which are assessed for the nature of impact, the severity of the event, and the relevant issue category.
Moderate Controversy
Texas, United States
EPA Sanctions Removal of Dioxins and other Toxins at San Jacinto River Waste Pits Superfund Site
| Relevant key issue | Toxic emissions & waste |
| Last Update Date | September 2019 |
| Assessment | Moderate |
| Status | Ongoing |
| Source | 13 Sep 2019_WASTE360.COM |
Kalamazoo River Superfund Site
Identified as Potentially Responsible Party in PCB Contamination
| Relevant key issue | Toxic emissions & waste |
| Last Update Date | February 2018 |
| Assessment | Moderate |
| Status | Ongoing |
| Source | 22 Feb 2018_SEC Filing; 26 Feb 2015_International Paper SEC Form 10-K, pp. 65-66 |
California, United States
Certified Class Action over Alleged Failure to Pay for Uniform Reimbursement and Inaccurate Wage Statements
| Relevant key issue | Labor management |
| Last Update Date | May 2019 |
| Assessment | Moderate |
| Status | Ongoing |
| Source | 31 May 2019_CLASS ACTION REPORTER |
Corporate Disclosure Not Aligned to ESG Reporting Frameworks
This category of data used in the MSCI ESG Ratings model includes data disclosed by the company that is not aligned with an external disclosure framework. Typically, the representation of this type of information varies widely across companies.
Programs to regularly monitor and measure water risk at company's operations
| Evaluation | Risk assessment covers all operations |
| MSCI ESG Scored Assessment | 10/10 |
Future targets for timber and/or paper sourcing
| Evaluation | The company has clear measurable targets or all products are already certified or traced |
| MSCI ESG Scored Assessment | 10/10 |
Strategy to reduce the environmental impact of packaging
| Evaluation | Clear articulation of comprehensive strategy with limited details on implementation |
| MSCI ESG Scored Assessment | 8/10 |
Aggressiveness of the company's reduction target in the context of its current performance
| Evaluation | Moderate target from a medium to high base |
| MSCI ESG Scored Assessment | 5/10 |
Demonstrated track record of achieving its carbon reduction targets
| Evaluation | On pace to achieve current reduction target |
| MSCI ESG Scored Assessment | 8/10 |
Capture GHG emissions
| Evaluation | No evidence |
| MSCI ESG Scored Assessment | 0/10 |
CDP disclosure
| Evaluation | Yes |
| MSCI ESG Scored Assessment | 10/10 |
Disclosure to CDP Water
| Evaluation | Yes |
| MSCI ESG Scored Assessment | 10/10 |
Scope of recycling programs in locations or circumstances where packaging waste recycling is not mandated by law
| Evaluation | Yes - as overarching strategy |
| MSCI ESG Scored Assessment | 10/10 |
Scope of consumers education programs on recycling (e.g. take-back locations) and package design and labeling
| Evaluation | Yes - comprehensive program in all locations |
| MSCI ESG Scored Assessment | 10/10 |
Scope of targets related to packaging content (e.g. lightweighted, recycled content)
| Evaluation | Targets have broad scope (company-wide or across all relevant packaging) |
| MSCI ESG Scored Assessment | 5/5 |
Future targets on packaging content (e.g. lightweighted, recycled content)
| Evaluation | Targets are specific and time-bound |
| MSCI ESG Scored Assessment | 5/5 |
Scope of product recovery targets
| Evaluation | Targets have broad scope (company-wide or across all relevant packaging) |
| MSCI ESG Scored Assessment | 5/5 |
Future targets on product recovery
| Evaluation | Targets are specific and time-bound |
| MSCI ESG Scored Assessment | 5/5 |
Achievements on packaging content (e.g. light-weighted, recycled content)
| Evaluation | Achievements apply to individual product or packaging lines |
| MSCI ESG Scored Assessment | 6/10 |
Achievements on product recovery
| Evaluation | There is evidence of improvement |
| MSCI ESG Scored Assessment | 7/10 |
Scope of chemical phase-out plan
| Evaluation | Company is targeting specific products and/or high priority chemicals for reformulation |
| MSCI ESG Scored Assessment | 3/10 |
Demonstrated track record of phasing out and/or reformulating products with chemicals of concern
| Evaluation | As required by law |
| MSCI ESG Scored Assessment | 5/10 |
Level of disclosure around product formulation
| Evaluation | Presence or absence of particular chemicals only |
| MSCI ESG Scored Assessment | 4/10 |
External recognition as employer of choice (last three years)
| Evaluation | More than one award in the last one year |
| MSCI ESG Scored Assessment | 10/10 |
Company witnessed strikes / lock-outs in the last three years
| Evaluation | No |
| MSCI ESG Scored Assessment | 10/10 |
Engagement surveys to monitor employee satisfaction
| Evaluation | Surveys conducted sporadically |
| MSCI ESG Scored Assessment | 7/10 |
Employee Productivity
| Profit per employee (USD) | 24,000 |
Product Risk Data
This category of data used in the MSCI ESG Ratings model is composed of many third-party data sources to evaluate product risks across over 1,000 business activities. Product risk data used in combination with mandatory product segment data provides an assessment of a companyâs business risk on the relevant ESG issues.
Water Intensity by Business Activity
Pulp mills
| Estimated Water Intensity | 42,922 m3/mil USD sales |
| MSCI ESG Scored Assessment | 9.1/10 |
Paper mills
| Estimated Water Intensity | 35,803 m3/mil USD sales |
| MSCI ESG Scored Assessment | 9.0/10 |
Corrugated and Solid Fiber Boxes
| Estimated Water Intensity | 25,493 m3/mil USD sales |
| MSCI ESG Scored Assessment | 8.6/10 |
GHG Emissions Intensity by Business Activity
Pulp mills
| Estimated Carbon Intensity | 587 tCO2/mil USD sales |
| MSCI ESG Scored Assessment | 6.6/10 |
Paper mills
| Estimated Carbon Intensity | 587 tCO2/mil USD sales |
| MSCI ESG Scored Assessment | 6.6/10 |
Corrugated and Solid Fiber Boxes
| Estimated Carbon Intensity | 298 tCO2/mil USD sales |
| MSCI ESG Scored Assessment | 4.9/10 |
Potential Reliance on Hazardous Substances by Business Activity
Pulp mills
| Number of substances of high concern | 29 |
| MSCI ESG Scored Assessment | 7.0/10 |
Paper mills
| Number of substances of high concern | 29 |
| MSCI ESG Scored Assessment | 7.0/10 |
Corrugated and Solid Fiber Boxes
| Number of substances of high concern | 11 |
| MSCI ESG Scored Assessment | 4.5/10 |
Product Segment Data
This category of data used in the MSCI ESG Ratings model includes geographic segment data disclosed by the company. This can be derived from segment-level reporting in annual financial filings, disclosed production or employee data, or information in investor presentations. MSCI ESG Research processes these disclosures into standardized geographies that are used to evaluate a companyâs ESG risk.
Geographic Segments: % of Revenue
| USA | 75.56% |
| Europe | 14.25% |
| Americas (excl US) | 7.60% |
| Asia | 2.60% |
Macro Risk Data
This category of data used in the MSCI ESG Ratings model is composed of many third-party data sources to evaluate product risks across over 1,000 business activities. Product risk data used in combination with mandatory product segment data provides an assessment of a companyâs business risk on the relevant ESG issues.
Water Stress by Country/State/River Basin
Alabama
| Baseline Water Stress (Total Withdrawals/Total Runoff) | Low (<10%) |
| MSCI ESG Scored Risk Assessment | 1.07/10 |
Georgia
| Baseline Water Stress (Total Withdrawals/Total Runoff) | Low to medium (10-20%) |
| MSCI ESG Scored Risk Assessment | 2.55/10 |
+18 other geographic segments
GHG Emission Reduction Target by Country
USA
| Annual % reduction in GHG emissions to meet target: | 1.5% |
| MSCI ESG Scored Risk Assessment | 7.2/10 |
Europe
| Annual % reduction in GHG emissions to meet target: | 1.09% |
| MSCI ESG Scored Risk Assessment | 6.6/10 |
Americas ex-USA
| Annual % reduction in GHG emissions to meet target: | 0.81% |
| MSCI ESG Scored Risk Assessment | 4.9/10 |
Stringency of Chemical Safety Regulations by Country
USA
| Regulation | Toxic Substances Control Act |
| MSCI ESG Scored Risk Assessment | 7.1/10 |
Europe
| Regulation | REACH |
| MSCI ESG Scored Risk Assessment | 9.1/10 |
Americas ex-USA
| Regulation | Various |
| MSCI ESG Scored Risk Assessment | 4.1/10 |
Asia
| Regulation | Various |
| MSCI ESG Scored Risk Assessment | 5.86/10 |
Geographic Segment Data
This category of data used in the MSCI ESG Ratings model includes business segment data disclosed by the company, including a breakdown of assets and revenue. This can be derived from segment-level reporting in annual financial filings, disclosed production data, or information in investor presentations. MSCI ESG Research processes these disclosures into standardized business activities that are used to evaluate a companyâs ESG risk.
Business Segments: % of Revenue
| Pulp Mills | 12.1% |
| Paper Mills | 18.8% |
| Corrugated and Solid Fiber Boxes | 69.1% |
Other Company Characteristics
This category of data used in the MSCI ESG Ratings model is derived from a wide range of data sources and internal analysis by MSCI ESG Research. This information typically provides additional insight on a companyâs ESG risk that is not wholly captured by product segments and geographic exposures.
| Estimated percent of sales reliant on Timber and/or Paper | 100% |
| Collective bargaining negotiation expected in next 12 months | No |
| Major Layoffs | No |
| Dependancy on Raw Material- Timber and/or Paper Dependancy | Score: 10 |
| Size and Composition of Workforce, No of Employees: | 51,000 |
| Footprint Volume of Raw Material Used - Timber and/or paper score | Score: 10 |
What if we cut down all the forests? footer copy
The graphic is for illustrative purposes only and is not a comprehensive list of data sources. Events Data: News articles and media reports. Macro Risk Data: Water Stress by Country/State/River Basin – Aqueduct, World Resources Institute; GHG Emission Reduction Target by Country – UNFCCC Country Targets; MSCI ESG Research LLC; Chemical Safety Regulations by Country – Stockholm Convention on Persistent Organic Pollutants Ratification; UNECE Globally Harmonized System of Classification and Labelling of Chemicals (GHS); Google Chemical Search Trends. Product Risk Data: Water Intensity by business activity: IERS’ Comprehensive Environmental Data Archive (CEDA); Water withdrawals per sales USD compiled by MSCI ESG Research; GHG Emissions by business activity: IERS’ Comprehensive Environmental Data Archive (CEDA); Eurostat – Air Emissions Accounts by Activity; GHG emissions intensities compiled by MSCI ESG Research Hazardous substances by business activity: Danish Working Environment Authority; International Chemical Secretariat (ChemSec) Substitute It Now (SIN) List. Governance Data: SEC Form 8-K (annual meeting voting results), SEC Form DEF 14A. Regulatory Agency Data: GHG Facility Emissions Data, US EPA Greenhouse Gas Reporting Program (GHGRP). Company Disclosures: 2018 Global Citizenship Report. Geographic and Business Segment Information: 2018 Annual Report.
Done right, standardized ESG disclosures can benefit corporates, investors, and improve the information that flows into ESG analysis. However, disclosure standards do not translate directly to comparability of performance. For the average company, self-reported ESG information comprises approximately 50% of the full suite of information needed to evaluate ESG performance, according to MSCI’s ESG Ratings methodology. Investors need independent sources of information beyond corporate disclosure to paint a more accurate picture of ESG risk and performance.
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