IPC is engaging with leaders of the electronics industry as well as expert ESG consultants to develop and continue to revise a guideline document for an industry-specific approach to ESG practices and reporting. We have labeled this effort ESG for Electronics as every industry faces unique challenges, and we want to clearly address those challenges specific to the electronics industry.
ESG (Environmental, Social and Governance) is often defined in different ways. This is logical as businesses across industries and through each of their supply chains vary in size, location, structure, and operations.
IPC’s ESG initiative will involve business leaders from various segments of the industry, geographies and from both public and private companies.
Involvement Efforts
To provide consistent and relevant guidance on behalf of the industry, IPC will be employing practices similar to our global standards development process/protocol.
We will start at the top of organizations with a steering group from diverse segments of the industry to review initial proposals and existing methodologies, directions and working groups will be established to refine and finalize the specifics.
ESG for Electronics Guidance
IPC works with the global electronics industry to develop and distribute guidance on key aspects of reporting that demonstrate a commitment to ESG principles. This guidance is intended to support the industry meet ESG goals by providing industry-specific definitions, benchmarks, self-assessments and guidelines.
Don’t miss ESG updates
Opt-in to receive communications on this initiative.
Frequently Asked Questions
If there are questions you have regarding ESG that might be helpful for the community and you don’t see them covered here, please send your questions to ESG_info@ipc.org and we will work to get answers included within the FAQ.
ESG is an abbreviation for Environment, Social and Governance. The term is used to describe an approach to integrating ESG goals in a company’s core business strategy and operations. ESG has gained significant momentum as the financial services community increasingly relies on ESG ratings to influence their investments. Advocates contend that those companies that integrate ESG in their business models are stronger, less-risky long-term bets. In practice, both public and private companies leverage ESG principles to shape their businesses and meet corporate social responsibility commitments.
ESG areas companies are developing goals for:
• Environmental: greenhouse gases, renewable energy, water management, waste management, energy management in manufacturing, landfill diversion, new headquarters building, product energy efficiency, and materials sourcing
• Social: employee health and safety, human rights, community, product lifecycle management, workforce diversity goals, employee development, fair wages and benefits, and collective bargaining
• Governance: gender composition on boards, executive pay linked to sustainability issues and/or diversity, shareholder meeting, directors have risk management expertise, supply chain integrity, ethics and compliance
Many public companies are already required to report on ESG-related issues, and IPC expects that those requirements are likely to increase. The industry knows from experience (e.g., conflict minerals) that new reporting requirements placed on public companies will flow down their supply chains. While there may not be a direct governmental requirement for private companies, public companies are likely to require reporting through contractual agreements. ESG reporting, in short, may become a customer requirement in many parts of the industry.
Top ESG Awards and Rankings that companies are paying attention to:
• MSCI
• Just Capital
• Dow Jones Sustainability Index
• 3BL 100 Best Corporate Citizens
• Ethisphere World’s Most Ethical Companies
• The COVID-19 pandemic and social unrest have led to a further emphasis of certain ESG issues from investors, including employee health and safety, diversity and inclusion, and climate change.
• ESG assets under management reached $1 trillion for the first time in 2020, with record number of next inflows to EGS funds (Morningstar).
• ESG funds are outperforming non-ESG funds in 2020 (Morningstar). A recent study from Morrow Sodali found that 100% of institutional investors considered ESG risks and opportunities in their decision-making over the past year. Furthermore, funds that invest according to environmental, social and governance principles saw net inflows of $71.1bn globally between April and June 2020.
• New ESG ratings continue to emerge, such as the CDP Temperature Rating, the ISS SDG Impact rating and a new suite of ESG ratings from Bloomberg.
• Major institutional investors such as BlackRock and Vanguard have re-emphasized that ESG is imperative from both an investment perspective as well as a voting/engagement perspective.
• A recent study from Morrow Sodali found that 100% of institutional investors considered ESG risks and opportunities in their decision-making over the past year. Furthermore, funds that invest according to environmental, social and governance principles saw net inflows of $71.1bn globally between April and June 2020.