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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
Voluntary Corporate Disclosure Aligned to ESG Reporting Frameworks
| 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: 8.8mt |
| GHG emissions (tCO2e) | Scope 2: 3.7mt |
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 | 43.1 |
SASBGRITCFDCDP
| Total estimated sales reliant on Timber/Paper (3 year avg, USD Million) | 22,042 |
CDP
+42 other indicators
Corporate Governance Disclosure
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
Facility Greenhouse Gas Emissions
| Mansfield Mill - Louisiana, US | 519,017 tCO2 |
| Valliant Mill - Oklahoma, US | 339,671 tCO2 |
| Savannah Mill - Georgia, US | 337,898 tCO2 |
| Riverdale Mill - Alabama, US | 337,123 tCO2 |
19 other facilities with reported GHG emissions
Events Data
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
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 |
+19 other indicators
Product Risk Data
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
Geographic Segments: % of Revenue
| USA | 75.56% |
| Europe | 14.25% |
| Americas (excl US) | 7.60% |
| Asia | 2.60% |
Macro Risk Data
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
Business Segments: % of Revenue
| Pulp Mills | 12.1% |
| Paper Mills | 18.8% |
| Corrugated and Solid Fiber Boxes | 69.1% |
Other Company Characteristics
| Estimated percent of sales reliant on Timber and/or Paper | 100% |
| Collective bargaining negotiation expected in next 12 months | No |
| Major Layoffs | No |
+4 other indicators
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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