This Week’s Tech and Tool News: ICE Reveals US/Europe ESG Disclosure Divide

ESG Investor’s weekly round-up of news on technology and tools in the sustainable investing sector, including ICE, Brown Brothers Harriman, Bloomberg and Persefoni.

A sharp contrast in ESG reporting levels and performance between US and European corporates has been highlighted by exchange operator and data provider Intercontinental Exchange (ICE), following the expansion of its ESG reference data coverage. According to ICE’s analysis of ESG data from components of the STOCC 600 Europe Index and the ICE US 100 Index, three quarters of European firms have disclosed Scope 1 and 2 emissions, compared with less than half of US companies. The analysis also found that European firms are much more likely to be including UN Sustainable Development Goals in their objectives (SDGs), with 74% and 58% respectively targeting climate action and gender equality SDGs, compared with 25% and 21% of US peers. The data found that companies on either side of the Atlantic had made similar levels of progress on appointing women to boards, with average female representation at just over a third at European firms and slightly more than a quarter at US companies. “ESG infrastructure has existed for a longer time in Europe and there are regional and country-specific regulations that require specific disclosures and additional reporting requirements that do not exist in the US,” said Savita Subramanian, Head of ESG Research at BofA Global Research. “As more companies report ESG data, and regulations vary around the world, investors and other market participants need access to clean, primary data to benchmark against competitors and make like-for-like comparisons,” said Lynn Martin, President of Fixed Income and Data Services at ICE.

Investor services provider Brown Brothers Harriman (BBH) has launched a new platform to offer clients access to specialist third-party fintech and service providers with expertise in areas including ESG data, insurance accounting, class action recovery services, and artificial intelligence. The platform, called Connectors, is available via BBH’s Informediary data integration engine. The Connectors programme initially offers access to four unaffiliated external firms, including IdealRatings, which integrates ESG factors across client operating models “to maximise opportunity and governance while building solutions to meet their strategic demands”. It also showcases several BBH-built solutions which can be provided together or separate from custody and administration services. “Asset managers need a future-ready operating model enabled for multiple service providers that can adapt as their strategy evolves,” said Chris Remondi, Global Head of Relationship Management at BBH.

Financial data and services provider Bloomberg has its expanded global equity index range, including emerging market country benchmarks, sector, and thematic index capabilities. The first Bloomberg thematic benchmark to be launched is the Bloomberg Electric Vehicles Index (ticker: BBEVT), which will be used in a KraneShares ETF (ticker: KARS). The index draws from proprietary Bloomberg research to capture companies that derive significant revenues from electric vehicles, energy storage technologies, autonomous navigation technology, lithium and copper mining, and hydrogen fuel cells. All the new indexes can be used as traditional benchmarks but can also be customised using Bloomberg’s extensive research and data library. “We are responding to investor demands for a comprehensive and cost-effective alternative that’s fully integrated with our data and distribution channels,” said Alan Campbell, Head of Product Management for Bloomberg’s Multi-Asset Index business. “The combination of our trusted data and expert analysis enables us to deliver unique thematic and factor indices to support any investment strategy.”

SaaS provider Persefoni has incorporated the new financed emissions standards developed the Partnership for Carbon Accounting Financials into its carbon accounting platform. The move will help banks, asset managers, and asset owners to understand the carbon impacts of their investment and lending activities using globally accepted practices, supporting their alignment with the goals of the Paris Climate Accord. The PCAF, a global partnership of more than 100 financial institutions, has worked with climate-oriented non-profits to develop a consensus-based, open-source approach to the assessment and disclosure of carbon impacts associated with loans and investments. “Sustainable finance and ESG teams are looking not just to calculate but analyse the footprint of their investment and lending portfolios and we enable them to do it upwards of 10x faster than they otherwise might have been able to,” said Persefoni Co-Founder and CEO Kentaro Kawamori.

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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