Hello, everyone. I'm Steve Soter, executive advisor for the Pro Group. I'll be your host for today's national meeting. The time is now. Get ready for the intersection of ESG and financial reporting. After a long and extensive search, we are so excited to welcome Lauren Uyeno to the team as our national director. Lauren comes to us from Alteryx, where she was instrumental in building and nurturing professional community groups. Lauren has a wealth of experience. I am very much looking forward to working with her. I'd also like to give a special thank you to Ashley Atwood, who's gone above and beyond during these last few months. We'll now turn some time over to Lauren to introduce herself and to walk through
Hey, guys, thanks, Steve, for the introduction. I am so honored and excited to join the team and to finally meet you all. One fun fact about myself, outside of work, I'm a proud dog mom to a handsome little guy named Arlo. You can see him on the wall. He might be snoozing behind there. I really just want to thank you all for attending today's meeting, and I look forward to engaging with you. Without further ado, let's go over some housekeeping. The pandemic has been quite tricky for us to meet in person. Members are tuning in remotely this quarter. We want to give a special shout-out to our advisory chairs for staying connected to their chapter members. On your screen, there are multiple engagement tools.
Most tools are resizable and movable, so feel free to move them around and get the most out of your desktop space. Slides are available to download in the resource engagement tool. Once again, feel free to play around with some things, h ave fun. If you have any questions during the webcast, you can submit them by using the Q&A engagement tool. We will answer as many questions as possible during the webcast. You may also submit troubleshooting questions in the Q&A box, and we'll reply via email. For those of you who are looking to receive CPE credit today, please note that we will be asking you to answer seven multiple-choice questions. To receive the credit, you must answer six out of the seven questions to attend full duration.
Once again, to receive credit today, you must answer six of the seven questions and attend full duration of today's meeting. The CPE poll questions will display on your screen for a limited amount of time, so please make sure you're ready to answer them when the question appears. Also, do not split or tile screens on your computer, as this can affect poll questions. Once you have met the CPE requirements, your certificate will be available for download in the CPE certificate engagement tool on your screen, and we will also send you a post-event email. Unfortunately, we are unable to provide CPE credit to those who have technology issues that prevent them from qualifying. Lastly, if you have a moment, please respond to the survey questions on your screen or following the webinar. I'm going to pass things back to you, Steve.
Thank you so much, Lauren. Again, welcome, d elighted to have you here as part of our national meeting. Well, I am very happy to introduce today's presenters. We have Bob Hirth, Senior Managing Director of Protiviti and Co-Vice Chair of the Sustainability Accounting Standards Board and Chairman Emeritus of COSO. We also have Chris Powell, Senior Manager of Technical Accounting and SEC Reporting from Salesforce, and Sheri Wyatt, US Assurance Diversity and Inclusion Leader and Sustainability Partner at PwC. I would like for each of you to introduce yourselves, and Bob, why don't we start with you?
Sorry, Steve. It's nice to be here with everybody, and I'm really looking forward to our session today. This is a topic that's top of mind for board members and all of you in finance and accounting, and I think what's really interesting about the topic, it creates an intersection between business and what's really important in the rest of the world. I'm looking forward to our conversation.
Well, thank you very much again, Bob, for joining. Chris, do you mind introducing yourself?
Yes, t hanks, Steve, so much for having me and for the opportunity to be here today to talk about our experience at Salesforce as we've expanded our reporting around some of our key ESG metrics. As Bob mentioned, we view this as a very important topic, and so we're really excited to get into some concrete examples with everybody.
Wonderful, w ell, I likewise am looking forward. Finally, Sheri, an introduction for us, please.
Yeah, t hanks, Steve. I'm excited to talk about ESG, t his has been something that my team and I are spending endless hours talking to our clients about, supporting them from strategy all the way through reporting and execution on their ESG strategy. I also am excited to be able to marry what I do internally with the firm from a diversity and inclusion perspective with helping our clients who are on similar transparency journeys around D&I and developing their strategy around D&I. A lot of great activity and momentum that we're going to be talking about today.
Wonderful, a gain, thank you all for joining us today. I personally am very much looking forward to the discussion. Of course, though, we always have to get to our CPE questions. We will actually start with the first, which you should see displayed on your screen now. As a reminder, you'll need to respond to six of the seven poll questions in order to receive CPE credit today. First question is, how directly involved are you with ESG reporting? Either very involved, somewhat involved, or not at all. Again, encourage you to respond. While our audience is doing that, let's get to the discussion. For those who are sitting here wondering, I hear all about ESG, what exactly is it? Why is it important? We're going to break it down for you. Bob, I want to start with you. What is ESG reporting?
How would you describe it? What does our audience need to know?
Steve, let me go back and talk a little bit about maybe what it was. I think that a lot of us, as we learn about ESG, would say this is nothing new. Great companies have always been concerned about their employees, and they've been concerned about how they impact the environment. What's happened today is there's many, many more stakeholders that want a lot of information. If you look at the evolution of this, we might think about this as a conservation activity, and then some of us remember all the eco and green activities that went on. That really began to morph to what many companies called corporate social responsibility, and they reported the activities that they were involved in the communities that they operated in, and the other contributions they made as a company.
I think then we picked up the word sustainability, and companies started to report on sustainability, and now we've gotten to ESG. I think what's good about that is it really covers a much broader set of topics. E is around how you interact and use natural resources. That really varies, of course, by industry. The S item tends to deal with the social factors of our employees, our suppliers, our communities as well. Then governance for everyone on the phone probably is the area that we think is maybe more mature or fully baked. We think about the reporting that's already done around governance and a board's composition and resumes of management and committee charters and things like that. There are a number of resources out there that people can look at.
Just to level set, you break this down into the E piece, the S piece, and the G piece. This is, Steve, so you just sort of took the words right out of my mouth here. We take a look at this; t his is a really good way to look at it. There are a number of places that will have these definitions. You look at how do we use natural resources? Do we use natural resources? Again, what's our reputation with the community and suppliers? A really hot topic around this is, for example, is there child labor in your supply chain? How do you know there is or there isn't? Again, the governance piece is really that piece that we might think about being more mature and more developed.
What else in terms of kind of ESG, Bob, would you call out? I know that there's certainly been comments, just the SASB has obviously been very involved, but organizations like the UN as well are getting involved. Any insight that you could provide for us there?
Sure, t he United Nations for a number of years had a project going on, and many people think of something that's called the United Nations Sustainable Development Goals. Again, if you'll make a note on United Nations Sustainable Development Goals, you'll see that there's 17 of those goals, and that's a place where many companies start. Many people think about those SDGs, as we call them, as the broad landscape of sustainability issues. The slide you see here today really probably underscores the reason why this has become such a hot topic. Let me tell you what you're looking at. The blue bar chart, which gets you to almost 3,000 asset managers and asset owners. These are organizations that have subscribed to what we call these UN Principles of Responsible Investing.
What's also key is the assets under management that those companies have, it's reaching almost $100 trillion. There's a real push here in terms of investors agreeing to follow these Principles for Responsible Investment, which talk about using these ESG factors in their evaluation of investments, requiring companies they invest in to report this ESG information, and tracking their progress.
Excellent, t hank you. Appreciate that. I know I'm kind of picking on you, Bob, but you are clearly the scholar here and have been living this for a long time. Wanted to just lastly ask about how is this being used broadly in companies? We've moved on to a slide here that I'm certain you'll speak to, but this is quite widespread, particularly with larger organizations. Is that correct?
Yeah, i f you sit back here, this sort of gets to my story about reporting on corporate social responsibility and sustainability and now ESG. The slide here shows you, since 2011, the number of S&P 500 companies. Remember what that is, 500 companies, largest 500 companies by market cap that are traded on U.S. stock exchanges. You can see what I call the good news is that we've had an increasing number of companies that report something, and now we're at 90% or 450 companies.
The bad news, you might say, is that a lot of this reporting is different. If we look at the financial reporting of these 500 companies, that reporting has converged. It is standardized. It is comparable. They use U.S. GAAP or IFRS, so you can begin to compare two companies. Unfortunately, if you peel the onion on this 90%, you're going to see that some companies use the SASB standards, some use the United Nations Sustainable Development Goals, some use a framework called the Global Reporting Initiative, some use both. Let me also say that this slide only takes us to 2019. I actually called the G&A Institute just within the last couple of weeks, and they said their 2020 information report should be out here in the month of June.
I think what people will find interesting is they've expanded the reporting, not just to report on the S&P 500, but they're going to do the same report using the Russell 1000 Index. They'll actually be able to catch a number of smaller companies and looking at their reporting, are they reporting, and what are they reporting against?
It's interesting you bring up the Russell 1000. Just by coincidence, was having a chat with a colleague yesterday who does quite a bit of research in ESG. She was specifically looking at the Russell 3000, and while I won't give anything away, it was actually surprising the amount of companies that were reporting on ESG to one extent or another, even across that broad of a spectrum of companies. We'll be anxious to see what the G&A Institute report comes up with. Sheri, let me pivot to you. Anything else to add? You're obviously deep into this as well. How do you think about ESG reporting?
Yeah, I think we certainly see an evolution of it. I would say that many of the companies that I speak with are trying to balance their ESG goals and strategy with the reporting on it and the maturity of that reporting process. Now with the SEC, who is taking a much greater interest in areas such as human capital and climate, the possibility of having required disclosures in the statements coupled with what Bob was just talking about in the sustainability report is increasing the focus on are companies ready for that type of disclosure? A focus on the data that underlies that disclosure, just given going into a document like an SEC document, ensuring that's investor-grade, it's accurate, it's reliable, and you're able to get that consistency year-over-year as you report it.
I would say that over the past year plus, we're seeing companies really start engaging more around how to tie what they're doing internally with what they are being transparent about to investors and consumers.
Got it, t hank you. You bring up a great point about the convergence of the financial reporting and non-financial, including ESG. Chris, I don't want to call you the poster child, but Salesforce certainly is active and has been doing this for quite some time. What's your view of all this?
Yeah, thanks, Steve. I would say that to talk about Salesforce's reporting process, I think it kind of goes back to one of Bob's earlier comments, that companies have been doing these types of programs for a long time, and for the context of Salesforce, just to give context, we're a global leader in customer relationship management technology, and our mission is to bring our companies and their customers together. We were founded 20 years ago on a set of core values, which were trust, customer success, innovation, and quality. Over the last 20 years, we've grown and focused on the success of our customers. That has led to our success financially as a company and just in general.
I guess the point is that as the expectations change of various stakeholders and investors, we have started to expand our disclosure on some of these programs that have existed for quite a while, including into some of our SEC filings. We have a section in our 10-K that's dedicated to ESG, and we also have a very detailed tear sheet that's not furnished or filed with the SEC, but it is published, and we're very public with that information. As the expectations have changed, I think the expectations around the data quality have changed as well, and that's where we start to see increased level of engagement from the finance team to really make sure that we're thinking about the metrics we're disclosing, and we're making sure they're providing useful information in a consistent and verifiable way.
If I hear what you're saying, is that to you and to Salesforce, really, ESG reporting initially was kind of a natural extension of the company's values in terms of, hey, we're going to report to our progress and so forth. I'm curious what led to the communicating values and so forth, that's one thing. Once you start to put that in your SEC filings, though, that sends a message in terms of the importance. I'm just curious if you could talk about if that was a tipping point or maybe what caused that type of reporting to sort of switch to what had primarily been more in the financial reporting domain of things?
I think the tipping point for us came; it was probably four years ago when we first included some of these metrics in our 10-K. It was really, for us, it was about consistency because when our customers, employees, and also our investors would come to some of our key events at Salesforce, they would hear the way that we described our company, and they would hear the way we described our programs. There's a lot of programs that we're really proud of, such as the 1-1-1 model, where Salesforce gives 1% of our equity, 1% of our employee time in terms of volunteering, and then 1% of our product away for free. When investors came and interacted with us, they saw we were talking about these various programs that we have.
What they wanted to know was, where can I go to find this information? How do I evaluate how you're doing? Because we know there's a lot going on, and we know you're very forward about business being the greatest platform for change, but where can we find this? That was for us to include it in some of the more investor-facing documents was really a result of our desire to be really consistent. Because one of our core values is trust, we wanted to be transparent. We've always tried to be very transparent with our reporting. It was kind of a natural evolution that, yes, these statements that we make publicly in front of our customers and governments, and our peers should also be aligned with how we talk about ourselves in other investor-facing documents.
Steve, let me suggest a little homework for everybody. We've got a lot of people listening in here and watching us, and they're all different stages or levels of maturity on this reporting. The first point is this G&A Institute report is available, I believe, at no charge. For those people that want to look at the slicing and dicing of information and the particular frameworks that are used by different companies, you might find that interesting. Secondly, for those people that are on the phone that know they've got a report out there and think they're a bit more advanced, I'd really urge you to take a look at just some of your other peer organizations, other companies that you think are leading organizations, and just look at what they're reporting.
People that are maybe more at the beginning stages that are listening to us and saying, "What the heck is this? What is this reporting? I'm not aware of my company doing it." First of all, make sure your company is not doing it. Do the same thing, t ake a look at some companies that you think are your competitors or peer organizations or just companies that you really admire in terms of their leadership. I think when you begin to look at those reports, you'll get the sense really now of what we're saying, what's being communicated, what kind of criteria and data companies are using and reporting.
I think that's a terrific suggestion, Bob. I know that when we started having the planning conversations for this meeting, one of the things I found was really interesting was to peruse through some of those reports, and then you start to get a sense for both the variety but also the consistency. There are some things that seem to be consistent. Of course, across industries and geographies, it could be hard to read between the lines there, but would just echo that's a terrific suggestion. I want to ask another question. Chris, I want to start with you because, as we talked about what is ESG reporting, especially for Salesforce, it really talked about values that a company espouses.
I also think that creating value with respect to ESG reporting is also a really important thing to consider, particularly as we think about the way that ESG has dramatically exploded, and especially last year. We think of 2020 as the year of COVID, and rightly so. I would also say 2020 is kind of the year of ESG. Chris, can you give us a sense of what has happened and why, and what's going on in the capital markets in terms of ESG reporting, and maybe why it's becoming now so important for the office of the CFO?
I think the main thing that's driving the engagement of the office of the CFO is a desire to ensure that information is reported that is accurate, transparent, verifiable, comparable across companies. The reason is because there are an increasingly diverse set of stakeholders looking for this information. In the past, if you go back maybe 10 years, it was Greenpeace or environmental activists. They're trying to figure out what your carbon emission data is and what your impact on the environment is. Now there's a totally new set of stakeholders who are looking at that information. It's not just investors, i t's also customers, i t's employees, i t's your partners, i t's your supply chain. Everybody's kind of trying to figure out this information.
As you start to have a broader set of stakeholders who have the expectation that as a company, you're managing these topics, especially if you talk about how much you care about these topics, I think it's just a natural evolution for the office of the CFO to get involved because it allows them to ensure a certain degree of quality of the information. Then hopefully, as time progresses and as these data sources get more and more integrated, it will allow for companies to make more informed decisions and consider returns that are beyond just the financial return and onto some of the improvements in your carbon footprint or in your D&I programs or diversity programs. I think the first step is gathering all this data and making sure it's of a high quality.
As you evolve from there, you can really start to use it to make some important decisions and really improve the function of the finance organization in some ways. Think about what a finance organization could look like in the future.
Well, thank you. I think that's terrific insight. Sheri, I know you're also having these conversations with your clients. How would you kind of describe and explain why things have exploded with ESG and why, again, more and more often, accounting and finance is being brought into the discussion?
Yeah, I echo everything that Chris just said. I also, Steve, agree with you that 2020 was kind of the resurgence of ESG. We've been talking about it for years. Europe has been dealing with it for years. I think 2020 seemed to be a culmination of a few events that I think really exposed to investors maybe some of the kind of risks in companies' business models. If you think about the pandemic and the impact to the supply chain, if you think about the racial injustice that we experienced in 2020 and the impact to the employee workforce, if we think about wildfires and the impact to business operations, I think it really highlighted that these type of ESG type events really could have an impact on a company's long-term value.
With investors more and more focused on that, I think a couple of things that we've seen just kind of from a pure financial perspective and just thinking about capital flow. ESG funds, the flow into those funds increased more than 400% in 2020, and just 200% in the first quarter of 2020, right? A significant amount of money that's flowing through these funds reliant on the statements that companies are making around ESG and the data that they're disclosing. Institutional investors believing that ESG is going to become the standard in five years from a financial reporting perspective. All of that together really sits nicely in the office of the CFO, right? Investors are demanding transparency, investor-grade data.
No surprise that given those numbers I just went through, that the SEC is weighing in, wanting to protect the capital markets, given the amount of funds that are flowing based off of ESG. I think all of that is the reason why we're seeing not only more kind of demand around ESG information, but also the role that accounting and finance can really play. Who better to know the reporting process and SEC regulations and the potential risk of disclosing certain information incorrectly than finance and accounting that does this on a regular basis? Coupled with how do we continue to present our company in a manner that investors truly understand not only the risk, but the opportunities tied to our business strategy.
Got it, t hank you. If I could ask just kind of a probing question there. It sounds based on what you and Chris described, this is fairly comprehensive. I wonder, what would you say to maybe skeptics, I say that in air quotes, who are saying, "Hey, that's all great, but nobody's asking me right now, either my lenders or my investors or my board, nobody's brought this up." Sheri, what would you say to them that, "Hey, look, if it hasn't happened yet, it will happen either by your stakeholders or by regulators?" Is it really just a matter of time?
I believe it is, I would be surprised if someone hadn't been asked, particularly if a public company hadn't been asked about ESG. I think that boards are starting to become more attuned to ESG. I think obviously investors are asking the questions and investor relations, the risk is that that maybe gets housed in, let's call a sustainability group within an organization. Finance maybe hasn't been brought along just yet, but I would really encourage individuals within the finance and accounting space to really start probing to understand what the company is doing around this type of reporting. Again, going back to your question, I feel like in the past ESG, particularly environmental and social, was about doing the right thing, right? That was at least the perception, right?
Maybe it was politicized in a way to think that your climate risk was a political issue and not a business issue. I think we're seeing companies more and more evaluate their business strategy and really understand how these type of events that occur really could impact their business and their operations, and that's what starts to make it a bit more tangible for companies. That is, there is the right thing to do, don't get me wrong, right? There's also the right thing for the business. I think that's where we start to move the conversation, and that's where we're going to start to see more action within companies.
Got it, t hank you. That is terrific context. Bob, you're certainly no stranger to the office of the CFO. Oh, Chris, go ahead. Were you going to add something?
Oh, no.
Oh, no worries. The joys of virtual platform, I was just going to say, Bob, you're certainly no stranger to the office of the CFO. Would love for you to weigh in here.
Yeah, sure. Let me go back and, Chris and Sheri said it, but I'll say it again. This reporting that has been done in the past, we've called it corporate social responsibility, some of those things, is now, as I said, become more important. More stakeholders want this information. The way I describe this in the role of the CFO organization is, this is now public reporting that people are relying on, and who better than what I always call all of you listening on the phone, the financial reporting experts or the reporting experts, to now get involved. I hope everybody that's listening is really looking at this and say, "Hey, even though I know I'm always overworked, there's a great opportunity here." I think that, again, the experience, your skill sets, your knowledge, your discipline are really key.
I also want to go back to the fact that we shouldn't forget that in a way, this is all rooted in risk or uncertainty. Remember those E, S, and G items? Let's take natural resources. Do you use them? What kind of supply are they in? Could the price go up? What about your workforce and these S items? How have you taken care of people because of COVID-19, and what's the risk there? What's the risk of employee retention and all that? I do want to mention that over at COSO.org, there's a publication that talks about enterprise risk management and ESG factors, and that is available for free over at the COSO website. Take a look at that. Maybe, Steve, if I can go to this next slide called Times of Change, i s that okay?
Yep, w e should have that on the screen now.
Okay, l et's just go. Everybody on this call knows this slide. Financial reporting, the financial statements was the standard primary channel of communication about what the company was doing. That has served us well. As we all know, it moved to more or less a pretty standardized comparative set of reporting, with the U.S. GAAP and IFRS. That's served us well. What we have today for some of the things that Sheri has mentioned is we just have more people, more stakeholders wanting more information. Now when I think about corporate reporting, all that financial reporting has been good, but it is no longer enough and it is no longer adequate to meet the information and decision-making needs of not just investors, but these other stakeholders like customers and suppliers and employees and communities.
My point here for everybody is corporate reporting, in my view, now has permanently expanded. Yes, keep with the standard financial reporting, but add to it these other E, S, and G reporting matters. It's not double-entry bookkeeping, but it is in a way its own sense of accounting because it is keeping track of and reporting information.
I guess, Bob, as I hear everything that everybody's saying, it really feels like if the root of accounting is to determine value, either based on historical performance or whatever, I think the other side of this is that, hey, these are metrics. These are pieces of information that will be informative to value, which is really part and parcel, core of what ideally, you're trying to accomplish through financial reporting. Do I have that right?
Yeah, absolutely, to b egin to look at some of these things. Is a company more valuable if it's got a great track record of attracting great people and retaining them versus a company that has turnover every year of 20% and they're similar organizations, right? Does the value of a company change if, as you understand the business operations, it uses a natural resource that's in short supply, and there's a projection that the price of that natural resource is going to go up substantially? The answer is, these items really do have an impact on what I'll call valuation and evaluation of an organization.
I suppose to go back full circle, Chris, you kind of led us off on this question, but really to go back full circle, sounds like that was really the point that you were getting is that, hey, we had values as an organization that we wanted to share and we wanted to report on. At some point, these things start to coalesce together where, certainly for large broad issues like the diversity of our workforce or our dependence on natural resources or the amount of carbon that we emit or whatever. It's hard to argue, skeptic or not, but it is hard to argue that at some point that does not have an impact on value. Again, to go full circle, was that the tipping point again that you described in terms of how this swung into the realm of financial reporting?
It was certainly a part of it. I think these topics are, as you mentioned, very broad and they're very interconnected, and they also play out potentially over long time horizons. Those are all considerations that maybe in the past have prevented some of these topics from being as transparently disclosed in SEC type of investor-facing documents. For us, it was largely consistency and transparency and really trying to show that we have these robust programs in place, and we're very actually clear in our 10-K. We make a statement that values drive value, and we really believe that at Salesforce. We wanted a way to show our stakeholders and also our investors that what are our key topics and what is the progress we're making towards those topics?
It's not just the policy around certain topics like diversity or philanthropy or environmental strategy, but it's really what are the metrics? How are you doing, and where are you trying to get over time? These things are all important in terms of capturing that value and communicating it and holding yourself accountable internally and externally.
Well, I love that statement that values drive value. ESG affords the opportunity for a great interplay between those two words, value and values, and I love what you shared there, t hank you. We do need to move on to the second of our poll questions, which our audience should see displayed now. The question is: who is involved with ESG reporting at your company? Would ask you to select all that apply, not just one. Is it accounting, finance? Does that include audit, legal, marketing, perhaps a dedicated sustainability team, HR, or others? Again, I would encourage you to respond to those questions. Six out of seven you'll need in order to get CPE credit for today's event. Let's move forward now and certainly, what the SEC has been saying. Well, they've been saying a lot lately.
Obviously, I think our audience will be interested to hear about that. Sheri, let me turn this to you and just ask if you could get us up to speed on the whirlwind and the volume of things that the Commission has had to say about ESG reporting lately.
Yeah, y ou're right, definitely a whirlwind. I'd say even between the time that we started kind of prepping for this and today, even more statements. It continues to evolve, so I just encourage you all to kind of stay really close to it. I'd say March in particular was a really busy month and active month for the SEC. They did a few things, f irst, the SEC's Division of Examinations announced that its 2020 examination priorities were going to include both climate and ESG-related risks. Those priorities were outlined, indicated that both climate and ESG considerations are being integrated into SEC's broader regulatory framework, t hat was statement one. They announced the creation of a climate and ESG task force in the Division of Enforcement.
Consistent with increasing investor focus and reliance on climate and ESG-related disclosure and investment, this task force is going to develop initiatives to proactively identify ESG-related misconduct. The initial focus will be on identifying any material gaps or misstatements in the issuer's disclosure of climate risk under existing rules. They're also going to start analyzing disclosures and compliance issues related to investment advisors and fund ESG strategies. Certainly, a lot more to come from that task force as it gets kicked off. I think the last significant event that happened in March was that the Acting Chair, Allison Herren Lee, released a statement requesting comment on 15 questions related to climate change disclosure. Literally, some of the questions that are open for comment are, should there be a new rule or amendments to existing rules?
Should it be tailored to the size or risk profile of an individual company? What should we do about the existing frameworks? As Bob said at the start of this, you have the alphabet soup of different kind of frameworks as it relates to ESG. Should there be an incorporation of some of those frameworks? Should there be a new framework? As well as to what extent climate risk should be part of these disclosures. I think it was 15 questions on the surface, but within each question, there felt like there's 10 questions within. Quite a bit of commentary that the SEC is looking to hear. At NYU Law Event, John Coates, the acting director of Corp Fin, advised registrants to not wait to submit comments because his expectation is the commission is going to move swiftly, just given the momentum around ESG.
A couple other things kind of noteworthy as well. In April, the Division of Examinations issued an alert indicating that examinations of registered investment advisors and funds claiming to engage in ESG investing activities are going to focus on three things. Portfolio management and their investment policies, performance advertising and marketing, and compliance programs. I mentioned before, there's been kind of a surge in ESG investing, ESG investing in this exchange traded funds, how people are making decisions around those investments. Again, the Division of Examinations really looking to probe deeper in that. I could probably go on and on about all the different statements, but I think another one that's out there is just encouraging audit committees to play a role in overseeing non-GAAP and other metrics and really understand how management uses them to evaluate performance.
The board and the different committees of the board may or may not have been involved in evaluating these items. The audit committee, to the extent that it wasn't something disclosed in an external financial statement, may not have been involved. I think as we start to see more corporate responsibility reports, more reliance on the data, the metrics in those reports, coupled with moving into potential SEC requirements for disclosures, that really does elevate the role of several committees within a board, including the audit committee. Maybe the last one I'll point out, and this is probably the most recent and exciting for me because this is an area where I tend to go very deep is, as many of you know back in November, Rule S-K was admitted to require human capital disclosures that are considered to be material to the business.
It was a very principles-based standard. I think in us looking at the disclosures, definitely a lot of diversity in the disclosures that were made in terms of tying it to how human capital relates to a corporate strategy, why it's material, qualitative versus quantitative. Just recently, SEC Chair Gensler said that his staff's going to propose a new rule on disclosing workforce or human capital metrics. Those disclosures could include data on issues such as workforce diversity, part-time versus full-time, and employee turnover. Where again, the S-K amendment was very principles-based. There seems to be an appetite, and Gensler actually said this is one of his top priorities, to get more prescriptive around the disclosures that companies are going to have to make around this. I think that we've certainly made a lot of stride in a short period of time around this.
As we talk to our clients, one of the things they always ask us is what's the crystal ball around the timing of when all of this is going to be effective. I wish I had that crystal ball; I probably would be very rich and won the lottery if I had. Those are all things that we see the momentum. John Coates mentioned that they're looking to move swiftly. I think we could see something in the next kind of year and a half, two years coming from them. Companies should start to be prepared. You think about some of the other financial reporting changes that have happened. The tendency tends to be we're going to start to do something closer we get to it being mandated.
I think the level of effort that some companies may have to undertake in order to get to a level of having investor-grade disclosures could be quite challenging, particularly for data that resides outside of a financial reporting system. A lot of the data is in Excel spreadsheets, in invoices, maybe dispersed across the organization in different systems. There's going to be a lot of work to ensure that companies are going to be ready for that disclosure when required.
Well, oh, go ahead, Bob, g o ahead.
Let me just focus in on one thing. If everybody looks at the second bullet point and looks at the words disclosure of climate risks under existing rules. Someone would say, "Well, what does that mean?" Let me help you. If you would go and Google SEC 2010 climate guidance, you might be surprised that in 2010, the SEC issued some very specific guidance on evaluating the impact of climate change. They start out with some background information about how climate change has become important in 2010. It's in the media. That a number of organizations are working to address it. They come up with their guidance that they call a reminder. I might suggest that it's a requirement. Essentially what that guidance is saying is the words like, you must address the impact of climate change.
Now when we say that under SEC guidance, we know what that means, which is, and if that impact is material under that definition of materiality, you need to disclose those things. What I'd like everybody to look at is when you look at what are the existing rules, go to that 2010 guidance on climate, and you'll find that, t hat's what they're looking for. They're going to go back now. They're looking at current filings to see, is this an organization where climate change probably or could be material, and is that addressed anywhere in their disclosures?
Bob, I appreciate you jumping in there, and I was just going to comment back to Sheri's point, and I think you just reinforced that there is that while people might be wondering, okay, well, where is the SEC headed? Where is this going to go? If you look at the existing guidance in 2010, and then you look at the questions that they have been asking, I think it's actually kind of clear at least where their thinking is evolving to and the issues that they're considering. Again, Bob, would love you to jump in here and kind of continue on maybe your additional perspectives on where you see this going with the SEC.
A couple things also to Sheri point about the questions that were asked. There is this comment period for companies to issue comment letters to the SEC on their questions. Sheri , I think at SASB, our count was between the 15 questions and the sub-questions, there's 52 items that you could answer. SASB recently submitted just within the last day its comment letter. That'll be on the SASB website. For those of you that are thinking of commenting, the comment period is due on June the 13th. Maybe to summarize what Sheri Wyatt said is there is no question that the SEC is on this. It's top of mind, t hey're marshaling resources. They're first starting with what are we requiring companies to do? It's that 2010 climate guidance, w e're going to look to see that they do that.
They're also looking at, as Sheri mentioned, these companies that are actually selling ESG-related products. How do they know they're ESG-related products? What is their voting been, for example, on climate-related matters and the like? I think Sheri made a really good observation and suggestion has been stay tuned. Maybe you ought to set up some type of Google alert, you really, as she mentioned kind of daily stuff is coming out, and you need to be prepared for that. I think she's given you a little sense of the timing on this, and I would just say going to be sooner rather than later. Steve, on this one, Sheri can comment on this too. I'm glad we got to this one. I think this is a great set of questions. They're really stepping back and really trying to get feedback, o kay.
Investors, issuers, other stakeholders, what are you looking for in terms of the kind of information, the type of information, the location of that information? I really felt that these were really nice, stand back, ask some big, broad questions, and get the viewpoint of all of these stakeholders.
Yeah. Bob, I think what, of course, resonates for me as an auditor is the question around assurance around the disclosures, right? If you start to get to the level where there's an expectation that you have assurance, and we could debate the level of assurance that may be needed, but who provides that assurance. It could be that you need a certified public accounting firm to do that type of assurance. Once you get to that level, then that becomes even more important for the accounting and finance, right? Not saying that we're going to get into a full SOX world when we talking about ESG disclosures, but that's where we'll start to see even more engagement by accounting and finance, when now you have audits over this information.
Yeah, absolutely. Let me just add something, r emember that Governance & Accountability Institute slide, the 450 companies of the S&P 500 that all have some type of reporting? If you go into that report, you'd find that it's 29%. Let's say about 30% of those 450 companies got some form of third-party assurance. As you mentioned, Sheri, in some cases, that third-party assurance is from an accounting firm. In other cases, that third-party assurance is only on the greenhouse gas emissions of the organization, and in many cases, that third-party assurance is provided from an engineering firm. Sheri may want to comment on this, but so everyone understands, there already are AICPA assurance and AICPA reporting standards related to other information that's reported. The ESG third-party assurance gets covered under that to a degree. There's a separate committee around sustainability reporting, at the AICPA.
The other side of the group, the IASB that regulates IFRS, they have those standards as well. If you go again and follow my guidance about looking at some other big peer companies, you will find a number of them that get some form of third-party assurance, like I said, from an engineering firm on greenhouse gas emissions, or from their accounting firm on the reporting that's done. Most of the time, the specified criteria that they use, like GAAP is specified criteria. They would use something like GRI or SASB. Let me stop there and see if Sheri has some comments. Please don't be surprised to find out that this third-party assurance is already occurring in some situations.
I agree with everything you just said, Bob. The framework is there for this to occur. I think it becomes a question of, is it an engineering firm or is it an accounting firm? I think that a lot of that's going to be driven by what investors and regulators are going to demand, right? The level of assurance that they would want around this data. I think that's a big more to come. That was one of the questions that the SEC had asked. I'm sure people responding will have their point of view. I think we tend to hear from our investors that they take a lot of comfort in the financial information that's reported because of a company's process controls coupled with the audit of that information, and if we're having a similar reliance on ESG data, should it follow a similar process?
Yeah, n ot to put Chris on the spot, but let's put him on the spot. Chris, why don't you tell us what Salesforce does?
When it comes to third-party assurance, we actually get three of our Well, more than three metrics, there's three key themes that we get reviewed. We've actually had our greenhouse gas emissions reviewed for four years. Our diversity inclusion metrics have been reviewed for the first year this year in fiscal 2021. We've also reviewed our key philanthropy metrics, which would be our annual social value, which is actually a custom criteria for us, but it's effectively the value of our donated and discounted products that over 51,000 nonprofits use, and the value of our grants that we give to the community. It is pretty interesting, having gone through the experience. We use our external auditor for our financial statements to perform a limited assurance review on these key metrics.
Having been involved from the finance side, from the controllership side, it is fascinating to go through the limited assurance review in accordance with specified criteria. For example, the carbon accounting is, for us, it's in accordance with the Greenhouse Gas Protocol. We also have some other metrics that are in accordance with custom criteria, which is our philanthropy metrics. I do think that it's a valuable exercise because it really raises the bar from a process perspective, and in a lot of ways, it starts to force companies to take this information out of whether it's Google Spreadsheets or Excel files, and think about the process that exists around this information because as everyone on this call can appreciate, a Google Sheet does not lend itself to a successful or easy third-party review or efficient third-party review.
I think that's been a great benefit for us to have that level of review performed, and I think it lends a lot of credibility to the metrics, and it also helps drive comparability. All these criteria are less known. I think there's a lot of ability for companies to make judgments and assumptions, and I think having a third party sanity check some of those judgments and assumptions is very valuable. We've been talking about this a lot, but going to the point of the role of finance and accountants, these types of processes are within our wheelhouse.
Obviously, we're not all experts on greenhouse gas accounting, but we can help the teams that calculate that by applying some of our areas of expertise to their existing process, and really everybody wins in that type of scenario, and the output is much more reliable and transparent data.
Chris, you bring up the concept of transparency here. I know, Bob, in our preparation, we've got a slide here that you want to speak to. It sounds like that's actually kind of a nice pivot point. Talk a little bit about the evolution of transparency that Chris is referring to.
Yeah, sure. If you really step back and look at the history here, starting on the left, companies used to provide no information because they thought it was proprietary. They didn't tell you what their revenues were, t hey gave you no information, of course, we began to get that going, there started to be some kind of reporting by all kinds of companies. Let me also refer to this as the double-entry bookkeeping reporting. What happened is companies started to go public as we had capital markets, as we sold pieces of companies or shares to organizations. We created some more structure, again, standardized, coherent, comparable. Let's look at these next two pieces, which are really important. Now we have all these companies reporting. We're using GAAP.
We actually converged all of the country-by-country GAAP from outside the U.S. through IFRS. What's really important here, remember I said corporate reporting now, in my view, is permanently expanded. That light blue section, S&P 500 companies, 80% tangible, 20% intangible. Those are the assets of a company. The double-entry bookkeeping back then got to most of that. Let's go over to this last item. We look today, it's flipped or it's more than flipped. I think some new studies will show it's 90% intangible. The double-entry bookkeeping is only tracking a small part of the value of the company and what's going on at the company. That's why I think this; I call it additional reporting. The expansion of corporate reporting is so important.
If you look at this, it's pretty logical that the response to this 80/20 or 90/10 flip should be in the form of something in addition to the double-entry bookkeeping that is only covering a very small portion of activities and things that generate value at that company.
If you just think about the evolution there of transparency, it certainly does seem like this is just a natural extension. We need to extend this conversation, of course, through the next CPE question, again, which our audience should see displayed on their screen. This will be an interesting one, i f ESG was required or is required beginning in 2022, how would you currently rate your readiness? Bring it on, we could manage, or we're not at all ready. Chris, well, I think I know what your answer is, and I think I know what our audience thinks your answer is as well. We want to kind of continue this discussion because we were just talking about the SEC.
They have been saying a lot about this lately. As we mentioned in an earlier discussion, a lot of this new focus on ESG reporting actually did not really originate with the SEC, or at least recently. Much of the activity's been outside of regulators like the SEC, at least in the U.S. It's been driven instead by asset managers, private equity, et cetera. You kind of wonder if the SEC is playing catch-up here a little bit. I'm just curious, Bob, what does that say about future regulation? What does that say about the place that ESG reporting has kind of taken in the whole capital markets ecosystem? Because again, I think those are really important questions for our audience and finance professionals to understand. Do you mind maybe expanding a little bit on that aspect of things, Bob?
Sure, Trudy has some comments. I do think the SEC was silent for quite a while. I was kind of scratching my head and saying, "When are they going to do anything or say anything?" Now, with everything that we've all said here today, they've kind of caught up pretty quickly. Also, I want to go back to that slide that talked about this history and where are we, and think about the history that we've moved this financial reporting model to having third-party assurance. Why? Because it's too important to not have it. I think what's also going to happen is as we think about that ESG, and I like to call it additional reporting, I don't like to call it non-financial or other.
This additional reporting, to me, it's very, very likely that the regulation that will require this reporting in some form will part and parcel have with it the validation of that information by a third party because that is so consistent with the capital market reporting conventions we have, in that this important information needs to be assured. My view of that's where it's going, like we said, there are already a number of companies that are achieving that third-party assurance and the profession, if you will, the CPA profession has got a plan to be able to report against various criteria.
Yeah, t hank you. Curious, you know, Bob, I wanted to just get your take on a couple of things. We've heard a lot then from notable figures, BlackRock, you know, Larry Fink has certainly had a lot to say. Just interested if you had any kind of insight on the impact of that. I mean, was January 2020 kind of the watershed moment there?
Yeah, a couple things. Again, remember, we've had sustainability, eco-green type of issues, Corporate Sustainability or corporate social responsibility, all those things going on. They've been kind of emotional, but again, remember, rooted in risk, the investor community began to look at their kind of issues around climate. There are issues with natural resources, there are issues with supply chain and all that. It's really even before 2020. Let's put this in context. Larry Fink is the CEO of BlackRock. BlackRock is the largest institutional investor in the world. I'd say today with the stock market the way it is here in mid to late May, their assets under management, just BlackRock, are about $9 trillion, okay?
For a number of years, Larry Fink has issued letters to every board member in the world, every CEO in the world, because they own a piece of every public company in the world. In a way, they've been telegraphing, pounding this message around sustainability, and in fact, they used the word sustainability before they kind of moved to ESG. I think this January 2020 was a little bit of a watershed, I call it shot across the bow. It was a shot across the bow because here you have a CEO that's writing to every public company in the world with this kind of rocket right up front, which is negative. We're going to vote against you; w e're going to vote against you as management.
We're going to vote against you as individual board members and chairpersons of committees if we subjectively don't think you're making sufficient progress on, as you said, sustainability-related disclosure. Telling us what you're doing, using these frameworks, but really important, and Sheri kind of got to this, reporting is the output. It's what are you doing underneath that in terms of your business practice and your plans and your strategy. They're saying, "If we don't get that information, we're not going to be happy, and our unhappiness manifests itself in voting against you." Then, I believe the guidance to date or this initial guidance is pretty clear. We'd like you to report under at least two regimes, the industry specific SASB guidelines and the Task Force on Climate-Related Financial Disclosures framework that is a climate-only framework.
I think that what's really happened here is the money's gotten involved. We shouldn't just look at BlackRock only. Certainly, Vanguard and Fidelity, State Street, all forms of asset managers. Remember the slide we had on the UN Principles for Responsible Investment, almost 3,000 asset managers and asset owners that are getting close to $100 trillion of assets under management saying, "We're going to consider ESG in the investment decisions that we make. We're going to consider and want companies to report this stuff." Yeah, here's the next threat. This is State Street making it actually quite clear, and I think what's a little scary about this is they're not naming people by name, but they're naming people by saying, chair of the nominating and governance committee.
We're voting against you if you don't simply disclose, good or bad, the racial and ethnic composition of their board, the DEI types of things. Then they'll say, "Next year, if you don't report this EEOC report, we're going to vote against the chair as well," and so on. I think that to say it's clear is an understatement.
The shot across the bow is a very apt description there for sure. Sheri, would love for you to weigh in here as well.
Yeah, I guess the only thing I would add is, D&I has been an interesting one, because we've certainly seen a lot more activism around this topic given 2020, to the point where we saw Nasdaq at the end of 2020, starting to think of, talk about a mandate for their listed companies and board diversity. This requirement from several investors around EEO-1 data, particularly if you came out and you were vocal around D&I and social injustice, just given the events, o kay. It's kind of put your disclosures where your mouth is, right? Show us what you're doing. For many companies, it's an uncomfortable place, right? I think where companies are on the D&I journey are probably even more immature than what you may see from an environmental standpoint.
I think, the SEC's focus on climate, the SEC's focus on human capital, the investor pressure around D&I think is obviously putting these topics in a much greater light, with everyone wanting to not only do the right thing, but also be able to translate that into how a diverse and inclusive work environment contributes to long-term value. There's so many studies that would suggest that a diverse workforce increases value, increases creativity, eliminates stale thinking, and therefore increases innovation. Really kind of forcing companies to think about it broader than, it's the right thing to do.
It takes me back to the phrase, Chris, that you use, values drive value.
Yeah.
As I've heard these comments, three from you and from Bob, it occurs to me that at least with respect to Salesforce, just given how kind of far into this you are, it's almost like you're a little bit insulated from this. I'm sure, to one extent or another, you're feeling pressure, but I guess I'm interested in your perspective. Are these types of things on your radar, but more from the fact that, hey, we've been doing this for a while, now we just need to be sure we're keeping up? I imagine that this probably isn't like lighting a fire under you, just given the amount that you've already done. Is that correct? Is that how Salesforce thinks about all of this as you observe how this is playing out?
At Salesforce, we have a saying, "Better, better, never done." I'm not sure that we ever feel like we're done. What I will say, for us, and we put it in a press release saying this, we're supportive of the SEC's initiative. It's obvious that at Salesforce, we think these topics are important, and we think holding ourselves accountable and transparently disclosing the metrics related to these topics are also important. That's why you see us getting a third-party review of the information. We're supportive of what they're doing, and we're kind of curious, I think like everybody, to see where it goes and see how it evolves. We've kind of already reached the conclusion that this information is important, and we're going to report on it on a regular basis.
We think it's important for all of our stakeholders and also for our shareholders to know this information. It is interesting to watch it play out from that seat. At the same time, there's always room for improvement. There's always room to consider new metrics and how those metrics drive value over longer time horizons. I wouldn't say the work's done, but it is a little bit of a different seat where I don't think we necessarily feel like we need to scramble as much as companies that haven't put as much time into these types of topics at this point.
Sure, t hat makes perfect sense. Again, appreciate all of the insights here. Loving this conversation. Let's get to the fourth of our polling questions. You should see it displayed now. How does your company currently view ESG reporting? Critically important, nice to have, but not a necessity, or not at all important. We've talked a lot about the why. The bulk of this conversation really has revolved around that. I want to pivot just a little bit here for a second, to the how. As we think about the operational aspect of kind of incorporating ESG, data occurs to me to be a significant kind of challenge here. As if there wasn't enough financial data coming, now you've got all kinds of sources of data from multiple systems, potentially, you think about how to deal with those prolific sources of data for these critical audience.
You also think about, well, what about the assurance and the validation? Bob, how should companies be thinking about that aspect of incorporating ESG reporting into certainly the financial reporting, but maybe just kind of the day-to-day? I think, Bob, you may be on mute.
You're right, I am, I'm sorry. Thank you, Steve.
No problem.
When we think about the topic of ESG, people get a little bit exhausted. There's so many issues. How do I figure out what I need to report? I can't report everything. I've got limited resources, y ou're right. There is a view that a number of companies go through something that we might call a ESG materiality assessment, not to be confused necessarily with the exact definition of material for the SEC. Here's sort of an example, t his is the typical two-by-two consulting speak graph that shows you an organization that looked at a number of issues. They surveyed, they polled their stakeholders, so they talked with them. It's usually employees and clients, suppliers, et cetera.
Through that process, they were able to begin to synthesize those viewpoints and not to the vital few, but a number of manageable items that were most important, most impactful, most decision-useful, and yes, I guess I'll use the word most material when it comes to ESG information. Again, remember my homework assignment, look at peer reports, look at competitors, look at your own. In a number of cases, you can see a number of leading companies that have a whole section of their report on materiality assessment, what they did to define the issues that they then report on, that they then set goals around, and that they have activities around. As you'll note here, this particular company did all that, and at the bottom, they ended up choosing a framework, the Global Reporting Initiative.
They felt that for those issues and what they wanted to communicate, that that framework met their needs the best way. Can we go to the next slide, Steve? Remember the G&A reporting 450 companies. This is some of the detail from that report that shows you the percentage of companies that usually call the Climate Disclosure Project Questionnaire, which gives you a score, or they used GRI, like the company in the previous example, or they used, remember, the UN SDGs. Those are those 17 little icons up there in the middle, and so on. One of the hows you get to is first figuring out what's most important to stakeholders, what existing frameworks might really help you get there. Steve, that kind of begins to answer your data question.
Rather than starting with what's all the data I need, let's figure out what's important. Let's figure out what existing frameworks or standards might help us get there, and then that helps us define, I'll say, as a more limited set of data that we now need to track and report and control. Really importantly, unlike financial statements that tend to be backwards looking, once we get this information as a baseline, where do we want to go? What goals and targets do we want to set?
It occurs to me, Bob, that for someone who is struggling with that question about these prolific sources of data, this actually should be a perhaps comforting and reassuring thought that these frameworks can exist, really to kind of help guide that direction about, hey, let's focus only on what's important to the end that it will provide meaningful reporting insights rather than, hey, we have this slew of data. Where in the world is it going to go, and how is all of this going to come together? I love that point. I know we were going to talk a little bit about assurance, and I'm just curious with that kind of this slide here. There are companies out there, we've talked about it already, that are getting third-party ESG assurance in the traditional sense of the word, i s that correct?
Yeah, l et me cover a couple things. You'll see a number of companies that it's voluntary. They've chosen to get this reporting that they're doing subjected to some form of, I'll say, limited assurance. That's everything from, as Chris talking about, really wanting to make sure that that information is right and accurate. You could say maybe there's some liability protection there. These are a few of, I'll say, many companies that are choosing to get this third-party assurance. I did want to focus on one in particular; to pick on, it's Vornado, which is a large New York office building company. If you were to get their report for 2019, you'll find they actually have two separate third-party assurance reports, both from their financial statement auditor.
One is a negative assurance opinion on their use of the GRI standards and the information they reported under that framework, interestingly, a positive opinion in all material respects related to the industry-specific SASB standards for their particular industry. That's a very good example of kind of where this is going in terms of third-party assurance. Again, the point to be made is there are a number of companies that are getting this. Again, some cases, it's just greenhouse gas emissions. That's accounting firm and/or engineering firm. As companies choose to report and say their specified criteria, like GAAP, tends to be SASB or GRI, they're getting that AICPA standardized report from their accounting firm.
Wonderful, t hank you. I think as we think about all of those sources of data, yet you've got the frameworks, it's a natural extension to think about assurance. Sheri, I know you're in this world all day, every day. Again, would love your insights here as well.
I guess the thing I would add is once you go through that process that Bob went through, right, and now we know the KPIs and the metrics that we're planning to disclose, I think the kind of next step in the evolution is around the underlying kind of controls and processes behind the metrics. We've said this a few times, right? That a lot of this data resides in various different places within an organization. You really want to ensure, not too dissimilar from financial-related data, that you have the right controls and procedures in place that are going to ensure that the company's going to produce ESG information that's consistent, that's reliable, that's accurate. Investors really want a qualitative context and a quantitative metrics on material ESG topics. Right now, currently the volume of disclosure is relatively low.
Certainly, when you look at the large public companies on a higher end, certainly if you start looking more at the SEC reporting, still remains low. We're actually moving into a realm where I think it's going to be much better. Investors are going to want to see more from organizations. They're going to want to see more transparency and more assurance around the accuracy and the validity of the data that's being reported and holding them accountable for the commitments and goals that are being set.
Thank you, Sheri. Chris, quickly want to go to you on the subject of data. Your position, I think, is so relevant to our members given that you are in financial reporting, but that you also are so exposed and involved in ESG. How do you think about the sources of data and maybe how it all comes together at Salesforce in order to support assurance and reporting and really all the efforts that you've been talking about?
Yeah, for sure, i t's interesting because between Bob and Sheri, when we divide it, how we think about it at Salesforce, there's four key steps, and we just covered steps one, and two. Step one being materiality assessment, then step two, identifying the underlying process and framework. The one thing that I'll also add on to those first two steps, just from our experience going through this, is that there's probably some unforeseen challenges, and there's ways as a finance team or an accounting team that you can leverage one of your preexisting processes to facilitate those two steps. When you're talking about identifying ESG reporting topics, some of the things that we've done is we've set up some internal governance mechanisms where we pull together individuals from all over the company, and we have them meet on a quarterly basis.
You think about the universe of ESG topics, it would include our sustainability team, our diversity and inclusion team, data privacy, cybersecurity, philanthropy, you name it. It's almost like a non-standards meeting that you would have as part of your normal quarter close process, and we just go through and we talk about what's happening in those groups. That's helped to connect a lot of people internally and helped us as a finance org, and we do this in partnership with legal and investor relations as well, and our impact reporting team. We all get together, and it helps us to know what's going on and decide what's happening in these various areas of the business and what are the key metrics that they use. I would also say, as you're starting, the frameworks are extremely helpful.
I would emphasize the SASB especially, just because it has a focus on decision-useful, market-informed, it has industry-specific to the 77 different industries. When we were starting, one of the things we did was a gap assessment using the SASB framework that was specific to our industry, the software and IT services industry. Once you've done that and you start to think about the data quality, then it comes to the reporting. For us, we put it into a couple of different buckets. Really, we try to transparently disclose what the policy is related to each topic, what's the goal related to each topic, what are the key metrics related to that goal, and the trend line. Then if there is third-party review, we reference that out.
You kind of see it starting to look like a process that is well-managed and that you have targets that you're transparent about and that you can clearly see the progress towards those targets over time. The last fourth bucket is advocacy, we're passionate at Salesforce about sharing what we do because we really try to be best in class with our disclosures. Like I said, there's always room for improvement and work to grow, but we do think it's important, and we think that accountants and finance professionals can play such an important role in helping enable these ESG teams to achieve their goals and really set up robust processes and controls that Sheri was mentioning.
Wonderful, l et's now move quickly as we begin to wrap up the discussion. We've got our fifth polling question here. From which of the following do you feel the most pressure to report ESG? Your board, investors, executive management, regulatory bodies, ratings agencies, customers or clients, from the public in general, or other? We'll encourage our audience to respond to that. There's two other things I want to get to here, and the first is, just as we think about ESG and maybe the inevitability of ESG entering this kind of financial reporting ecosystem to one extent or another, it feels like ESG reporting will be ubiquitous in the long term. I wonder if there's a short-term opportunity for ESG to be a strategic differentiator. Bob, I want to start with you, t here's the slide that we had talked about.
Wonder if you could quickly share just some thoughts there on the strategic differentiator potential for ESG in the short term.
Sure, Steve, w ell, I think as you've heard us today, this is a developing topic. That means some are more developed than others. To your point, I think there is a window here for some companies to differentiate on their ESG reporting and performance. I mean, even if you look at some of the reports that are out there, they're quite different. There's a kind of a maturity scale to those. Everybody will catch up at one time. It's likely to be regulated in a more consistent way. For those of you that are maybe trying to get a little edge, this may be a way to achieve that, right now, at least for some period of time.
Wonderful, w ell, let's move on to our sixth question. You can tell we've hastened our clip just a little bit because there's one important thing that I do want to get to that I think is a really important point. Before we do that, would ask our audience this question: Would you like to hear more from PwC on their ESG resources? Yeah, I would encourage you again to respond to six of the seven questions. Let's get now to the final question, and that is, what potential career opportunities does ESG reporting represent for our audience and our members? Chris, I want to start with you, and then Sheri, we'll go to you, because Chris, you've kind of lived this. This has really now become a key part of your career.
I'm just curious what insights you could share on our members who might be wondering if, hey, maybe ESG is something that I could do to differentiate my career.
Yeah, a s you mentioned, I've lived this, the context is my job is now full-time focused on ESG reporting for Salesforce and connecting some of these teams together and helping advance our program. I think it's a huge career opportunity, I mean, it came across in this conversation that the trends are clear. People really care about these topics. Companies that want to be successful in the future are going to have to manage these topics. You've also got rapidly advancing regulations coming down coming in potentially the near future. I think that there's a lot of work to be done. The other thing that I'll mention is that if you're passionate about these topics, there is a role that you can play, and it's a role that can really make a difference.
You can really help to enable your sustainability team or your diversity team, you can help elevate them by understanding what they work on, that they're doing important work, and understanding how you can help them. I always encourage people to reach out to those teams at their own companies and understand what the programs are, and understand what they're saying already and where they need help, because there's just so many ways to engage. If you like to learn new things, I think the amount of learning that you can have in this space and the amount you can help those teams advance their priorities is just the sky's kind of the limit. I think it's a great career opportunity, would strongly encourage, especially if you have the passion for the topic, everybody to get involved.
Sheri, this similarly has become, obviously, a big part of your career. Any brief thoughts you'd also share on opportunities for our members?
I would just say, we within PwC have people who are so interested in doing this type of work. I think that what gets people excited, particularly our accountants, is that you're able to do what you love around accounting and financial reporting, but also marry it with your own purpose and values, right? That you can really find that incremental meaning in the work that you do. Again, I think the attributes of accounting and finance professionals play very well with this type of work. I certainly encourage you to continue to explore how you can not only continue to do your current job, but also marry it with the work that's being done around ESG and reporting.
Bob, I want to give you kind of the final word here. You and I did a podcast recently. You shared some really insightful advice about becoming an expert at something that's new. Wondering if you could just kind of round out this discussion briefly and just to share that nugget that you shared with us? I thought it was terrific.
Absolutely, w e have a lot of people on the call today that have got all different levels of experience. What I want to share with you is, whenever something is new, let's say ESG is more or less new. Regardless of your level of experience, you have the opportunity to become as good as anybody. For those of you that are earlier in your career, if you begin to get into this, you can be as good as anybody because no one knows a lot about it yet. I want to really get you to understand that. Regardless, again, of your experience level, hopefully, you'll all want to become an expert at this. Maybe to round it out, all of you are, I'm sure, at great companies that are already doing a lot of good.
The opportunity here is to really, again, with your skill set that Chris has talked about and Sheri's talked about, to help your companies do even more good, I'll leave it at that.
Wonderful, w ell, thank you. Thank you all for such a terrific discussion. Regrettably, we don't have any time for Q&A, but if you asked a question or still have a question, put it in the engagement tool. We will get the email, and we will be happy to engage that way. Again, I really want to thank Bob, Sheri, Chris, for the discussion. Before we hand it back over to Lauren to wrap up, I want to take a very brief moment and talk about the active committees of the SEC Pro Group, including the Global Consumer Goods and Industry Peer Group, the Staffing Industry Technical Accounting Group, the Disclosure Effectiveness Committee Group that met recently. Again, thank you for continuing to be involved.
I'm really happy to announce that due to very strong member interest, we have formed an ESG Reporting Committee to provide resources and facilitate discussion for our members as they incorporate and work through their ESG reporting initiatives. Special thanks to Levantia Carrera, Jonathan Gregory, David Kanarek, and Renee Miller for agreeing to serve on our leadership team. We are going to include additional detail about how to participate and get involved in this committee in a post-event email. If you see ESG reporting on your horizon, or maybe it's staring at you in the face, and actually to Bob's comment previously about the opportunity here, we're hoping that these committees and this committee. If you're interested in participating in the committee, please let us know. That actually is the last poll question that we have, w ould encourage you to answer that.
Again, thanks to our panelists. Thanks again to our audience, w e'll now hand it to Lauren to get us wrapped up.
All right, t hanks, Steve. For those of you who qualified for CPE credit, you may download your certificate now in the CPE certificate engagement tool, or we'll send out a post-event email that you will receive later today. Upcoming events, be sure to check out our website for the next events that we have on the calendar. We have a 10-K prep session on June 24th, and I love this title, At Lease We Found a Solution, on June 29th, discussing technology selection and implementation. We are also excited to announce that our third national meeting will be held in September as part of Workiva's Amplify User Conference. Our national meeting will feature Lindsay McCord, the Chief Accountant of the Division of Corporation Finance at the SEC, as well as a disclosure review manager.
If you have questions for corporate finance and the person who might very well be reviewing your filing, please let us know. Again, if you are not a member of the SEC Pro Group, please consider joining us. Thank you so much for meeting with us today, and this concludes our webinar. We'll see you guys next time.