New Venture Seeks to Ease ESG Reporting Burden

Gustave Loriot-Boserup has left London CIV to set up Compass Insights, a platform aiming to support small institutional investors with ESG data and analytics. 

The ever-growing number of disclosure regimes being introduced by regulators globally has evidenced a skill gap in the investment industry, calling for the increased automation of ESG reporting. 

Aiming to respond to this need, Gustave Loriot-Boserup recently left his responsible investment manager role at local government pension scheme London CIV to set up Compass Insights – a brand new ESG analytics and advisory platform, which will formally launch later this year.

“Tackling all the different sustainability challenges we have in front of us, including climate change, biodiversity, natural capital and the just transition, is a massive challenge,” Loriot-Boserup told ESG Investor. “Finance is certainly the way in, but in order to do this efficiently, we need the right people spending time on this.” 

According to him, responsible investment has not had a meaningful impact to date – the main reason being lack of expertise when it comes to compliance with the many sustainability-related regulations that have been springing up across jurisdictions. 

“People are wasting their time with things that could be done in a much more automated way,” he said. “The investment industry’s ESG skills gap will further intensify for firms due to the growing number of disclosure regimes.” 

Ongoing and upcoming requirements the platform will aim to assist firms navigate include the Task Force on Climate-related Financial Disclosures recommendations, the EU’s Sustainable Finance Disclosure Regulation and Corporate Sustainability Reporting Directive, and the UK’s Sustainability Disclosure Requirements. 

“These reporting efforts are extremely resource-intensive and divert attention from more important tasks for experts to undertake, including ESG investment and risk analysis,” Loriot-Boserup added. 

Small investment firms and pensions funds with limited resources are most likely to be affected by this issue.  

Research by Japan-based tech company Kyocera and think tank Economist Impact recently evidenced this skills gap, having found that just 6% of London-based companies believed they had the green skills needed to transition. Last year, 17,000 green-related roles remained unfilled in the UK finance sector, the study showed. 

Supporting smaller firms 

Later this year, Compass Insights will join the vast global ESG reporting market, which was valued at £570 million (US$725.7 million) in 2021 and is expected to represent £1.2 billion by 2027. 

The company is currently in a prospecting phase and is engaged in dialogues with future clients to understand their resources and needs, and ensure it can address those.  

“We are already capable of doing analyses, but the platform is still being fine-tuned to ensure it is exactly the right fit for users,” said Loriot-Boserup. “We’re looking to work with a first set of potential clients and run trials on the platform, which will help define what it will look like from a features perspective.” 

The platform is also intended to function as a marketplace for different data providers, offering users the option to select which data they want for their specific needs. 

“The whole purpose of this business idea is to focus on organisations such as small investment firms, institutional investors and pension funds, which typically have limited to no resources to develop their own set of ESG data,” he explained. “It’s really taking things to the next level and eliminating all need for human resources when it comes to dealing with ESG compliance.” 

Stretching resources 

Loriot-Boserup spent more than three years at London CIV as responsible investment manager. There, his responsibilities included leading the development of a similar platform to the one he’s now building out – an experience that he learnt much from.  

 Prior to that, he was senior specialist for ESG analytics and client delivery at carbon and environmental data analysis firm S&P Global Trucost for two years. 

“I believe existing solutions have failed to address the ESG skills gap in the finance sector,” he said. 

The two primary options currently available to firms for ESG integration, aside from building their own teams, are either to work with investment consultants – who provide a one-time portfolio analysis – or with data providers.  

But both of these scenarios present significant drawbacks for smaller firms, Loriot-Boserup explained. “Investment consultants are quite expensive compared to more automated solutions,” he said. “And data providers usually offer solutions that I would say are inadequate for organisations with limited or no ESG expertise.”

The practical information hub for asset owners looking to invest successfully and sustainably for the long term. As best practice evolves, we will share the news, insights and data to guide asset owners on their individual journey to ESG integration.

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