This Week’s Tech and Tool News: New Ratings Platform for Nature-based Offsets

ESG Investor’s weekly round-up of news on technology and tools in the sustainable investing sector, including Sylvera, Investics, Arabesque, ICE, Fitch, GoldenSource.

UK-based start-up Sylvera has launched a new platform to provide independent data and ratings for nature-based carbon offset projects. Offered via web platform or API, the firm aims to provide real-time information on the carbon sequestration performance of offset projects via geospatial data, collected by drones and satellite technology and analysed by machine-learning algorithms. This approach allows for more accurate, comprehensive and frequent gathering of data, compared with manual assessments based on extrapolation of small samples. Sylvera intends to work with buyers of carbon credits, financial intermediaries and offset project developers to provide greater accuracy about the impact of nature-based offsets on greenhouse gas levels, thus increasing market confidence, scale and credibility. According to Sylvera’s website, the firm will provide users with data on “raw carbon performance, additionality, permanence, co -benefits and risk”. The firm scores projects using a proprietary rating system which can be used to assess projects prior to purchase or to monitor performance over time. “Our data can help the market grow and become efficient, delivering capital to projects that genuinely and effectively protects and enhances natural carbon sinks at gigatonne scale,” wrote CEO Allister Furey in a blog published yesterday. Furey also announced a US$5.8 million seed investment round led by Index Ventures, and supported by existing institutional investors Seedcamp, Speedinvest and Revent, as well as a US$2 million research contract to work with UCLA, NASA’s Jet Propulsion Lab, and University College London.

Investics Data Services is to offer Arabesque S-Ray ESG data through its Investics Cloud Ecosystem and Investics DARTS data marketplace. Clients will be able to subscribe to one or more datasets via AWS Marketplace, integrate the S-Ray ESG data with portfolio holdings and other investment data for performance, risk and exposure analysis, and keep up with regulatory ESG reporting requirements. Currently covering over 8,000 of the world’s largest listed corporations, the machine learning technology of Arabesque S-Ray combines over 250 ESG metrics with news signals from over 30,000 sources to drive key sustainability insights for its clients.

Data, technology and market infrastructure provider Intercontinental Exchange (ICE) has expanded its ESG reference data platform to include “high-quality, granular data” that enables actionable comparisons across companies and sectors. ICE’s ESG reference data service now includes coverage of companies in key indices, including the ICE US 1000 Index, which measures the performance of the top 1,000 US-listed companies. ICE plans to launch coverage for additional companies and geographies later this year. ICE’s ESG reference data provides detailed attributes and information that can help investors and other market participants to better understand the ESG risks and opportunities across a broad mix of global corporations. According to ICE data, 48% of US large-cap companies report their carbon emissions, with 25% of companies in the ICE US 1000 Index asserting that tackling climate change is a company objective.

Fitch Ratings is offering a new ESG Sector Discovery Tool for Financial Institutions which provides a top-down view of the credit relevance and materiality of ESG issues to the credit ratings of banks, insurance companies and non-bank financial institutions across all regions. It shows the distribution of Fitch’s ESG Relevance Scores (ESG.RS) for 1,258 financial issuers and helps users visualise changes in ESG issues between 4Q19 and 4Q20. The tool highlights trends and allows users to visualise where ESG issues are affecting portfolios. For example, the ‘Exposure to Environmental Impact’ (EIM) score assigned to the vast majority of rated financial institutions is ‘2’, meaning this environmental issue has no impact on the credit rating. However, by using the tool’s filter, users can identify the 160 financial institutions that scored ‘3’ for EIM, indicating a low credit impact, and the 14 that scored ‘4’, highlighting moderate negative credit impact.

Data management solutions provider GoldenSource has launched GoldenSource ESG Impact, a solution that offers buy- and sell-side firms ESG data coverage, comparison, quality checks and portfolio screening. GoldenSource ESG Impact supports all standard and data vendor-proprietary materiality maps, enabling firms to compare what the different data providers consider useful information in a given industry sector. Users can pull together scores, ratings and ranks from the broad range of sources and then drill down into the relevant underlying data points, thus providing market participants with insights most relevant to their business or investment strategy. GoldenSource inbound APIs allow on-boarding of current and future ESG content from new data sources, allowing users to evolve their ESG strategy based on new information and quality considerations.

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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