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Measuring What Matters

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🛋️ Sitting down with Jean Case

I’ve always been a goal-setter in business and in my personal life. I’ve come to truly appreciate the role of goals and measurement in helping to achieve desired outcomes. The old saying “measure what matters” could not be more near and dear to my heart.  

In the world of finance and investing, we rely on measurement to tell us if our investments are increasing in value or not and how we’re doing against others who invest similarly. For those who want to align their investments with their values, another kind of measurement matters. Specifically, how can we determine if the companies or funds we hold, or intend to invest in, live up to their stated commitments in areas we care about such as the environment, diversity and fair practices, or even good corporate governance?

This issue of FWIW takes a look at measurement and the emerging standards that are being established to help investors gain insight into what is meaningful action and progress in these areas and what is not. Measurement and standards will be a recurring theme in FWIW, but this issue is exclusively dedicated to the subject. We hope it helps you in your values-aligned investing journey.

All the best,

J.


Tidying up ESG measurement

Graphic representing the stuff you would find in "that kitchen drawer, the one stuffed with gadgets, utensils, and sauce packets."

You know that drawer in your kitchen, the one stuffed with gadgets, utensils, and sauce packets? All those tools are handy but definitely need ‘The Home Edit’ treatment to maximize their use. ESG measurement isn’t all that different — the sheer number (over 30!) and the varying applications of these measurements have created a sense of overload. Facing this confusing abundance are the growing majority of retail, or individual, investors who want to invest their wealth in efforts that spur positive impact. Don’t worry though, several initiatives are underway to streamline it all.

Back in the fall of 2020, the World Economic Forum announced “The Stakeholder Capitalism Metrics Initiative” (SCM) to bring consistency and comparability to ESG measurement. SCM drew from existing measurement standards and tools for ESG to try to create a cohesive standard. These include the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), and Task Force on Climate-related Financial Disclosures (TCFD) — great resources for big, institutional investors, but honestly not super useful to the average retail investor yet. But, with this new effort, we’re moving in the right direction. It would be like if Gap, Madewell, and Levi jean sizes actually matched.

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