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This Week’s Tech and Tools News: Arabesque Launches Climate and Regulatory Solutions

ESG Investor’s weekly round-up of news on technology and tools in the sustainable investing sector, including Arabesque, FTSE Russell, BNP Paribas Securities Services, MSCI, Moody’s ESG.

ESG data and analytics provider Arabesque has launched a new suite of Climate and Regulatory Solutions aimed at helping companies and financial institutions to integrate climate considerations in their decision-making, as they transition to a net-zero economy by 2050. Arabesque said the new solutions will enable clients to “capture net-zero opportunities, comply with new regulatory requirements and meet growing climate commitments”. The new solutions include the Emissions+ Data Module, which provides a comprehensive picture of Scope 1, 2 and 3 GHG emissions by companies and the climate impact of their full operations and value chains. Also included in the suite is the new Green Revenue Module, which maps companies that are generating revenue for their businesses either partly or fully by green business models such as renewable energy. The new suite comprises a range of data and insight solutions grouped around three core offerings: Validated and High-Quality Company Data; Climate Alignment Solutions; and Regulatory Solutions. The Validated and High-Quality Company Data offering includes: disclosed and validated GHG emissions data on more than 7,000 companies; green revenues data covering 120 green business activities; and 120 climate-specific metrics covering over 95% of global market capitalisation. “As Brussels unveils its proposals for a legislative framework to support the ambition of reaching net-zero by 2050, and as we approach COP26, the need to match climate pledges with tangible results is growing. Our new Climate and Regulatory Solutions can help clients navigate towards a net-zero future, better understand the increasing complexity of climate regulation, and identify new climate-based opportunities,” said Dr Daniel Klier, President of the Arabesque Group. Arabesque is comprised of three businesses, Arabesque Asset Management, Arabesque S-Ray and Arabesque AI, that work together to mainstream sustainable finance through investment solutions, AI and financial technology expertise.

Global index, data and analytics provider FTSE Russell has launched the FTSE Green Impact Bond Index Series, which is designed to measure the performance of green fixed income markets and offers investors a choice of global, European or US market coverage. The index series consists of investment grade and high-yield multi-currency green debt issued by government, government-sponsored, supranational organisations and corporations. FTSE Russell has set “rigorous eligibility requirements” for index inclusion, based on the Climate Bond Initiative’s (CBI) Aligned Green Bond List as well as other criteria including minimum market size, credit, and currency requirements. Available in multiple currencies, the index series includes several investment grade sub-indexes such as the FTSE WorldBIG Green Impact Bond Index, FTSE EuroBIG Green Impact Bond Index, FTSE USBIG Green Impact Bond Index and the FTSE Global Green Impact Bond Index, which comprises of investment grade and high-yield debt. Pricing and reference data for these benchmarks is provided by Refinitiv. As of June 2021, the total market value for bonds in the FTSE Global Green Impact Bond Index is approximately US$661.4 billion and US$632.7 billion of par value with a weighted average coupon of 1.52%. Green impact bonds ensure that proceeds derived from the debt issuance are specifically earmarked for projects that have environmental benefit such as renewable energy and low carbon transport. Continued inclusion on the CBI’s Aligned Green Bond List requires issuers to update the market on the use of proceeds at least annually.

Manaos, the ESG marketplace operated by BNP Paribas Securities Services, has onboarded two new partners to enrich its sustainability data and analytics offering. Util uses machine learning models to quantify the degree to which every listed company positively and negatively impacts the 17 UN Sustainable Development Goals and their 169 targets. To objectively evaluate a company’s real-world impact, Util focuses on the effects of its products and services and draws conclusions from peer-reviewed journals. Manaos has also onboarded data from V.E., part of Moody’s ESG Solutions, a global pioneer in ESG investing and sustainable finance. V.E.’s data, scores and assessments help investors to better understand their exposure to ESG risks and opportunities, and facilitate reporting, innovation and active engagements with companies. In March, Manaos announced a partnership with Clarity AI, a leading sustainability and data science company. Manaos is an open servicing platform designed for institutional investors to manage their post-trade investment data. As part of its Open ESG strategy, Manaos partners with leading sustainability fintechs to give users ready access to a wide range of ESG data and analytics tools. “The onboarding of Clarity AI, Util and V.E. makes a strong case for the benefits of complementary approaches to ESG. Using Manaos, investors are finally able to assess the ESG impact of their portfolio by mapping their investment data to the most innovative fintechs on the market quickly and efficiently,” said Patrice Hiddinga, CEO of Manaos.

Data, analytics and research services provider MSCI has launched a quarterly Net-Zero Tracker to show the progress of listed companies towards the goals of the Paris Agreement, highlighting climate leaders and laggards. According to the inaugural Net-Zero Tracker, the annual emissions of listed companies globally are still at the same level as 2013, despite concerted public and private sector efforts to prioritise climate change. It also shows that companies would deplete the remaining 1.5°C-aligned emissions budget (61.4 gigatons CO2e) in less than six years, without any change to their current emissions. The MSCI Net-Zero Tracker provides a quarterly gauge of climate change progress across a global universe of 9,300 publicly listed companies based on the MSCI All Country World Investable Market Index. It aims to bring new levels of transparency to investors and policymakers regarding listed companies’ action on climate, providing aggregate progress on temperature alignment. “The MSCI Net-Zero Tracker will allow investors to monitor whether listed companies have credible plans to reduce their carbon footprint and track the alignment of their own portfolios with the 2015 Paris Agreement,” said Remy Briand, MSCI’s Global Head of ESG and Climate.

Moody’s ESG Solutions Group has unveiled a new tool to generate real-time predicted ESG scores for millions of public and private small- and medium-sized enterprises (SMEs) worldwide. Based on a model derived from Moody’s proprietary ESG scoring methodology for large-cap corporates, the ESG Score Predictor provides financial institutions with essential quantitative data for portfolio and risk management, and helps companies monitor ESG risk across their global supply chains. The ESG Score Predictor leverages “state-of-the-art advanced analytics” to provide 56 ESG scores and sub-scores for any given company using location, sector, and size. Customers can access approximately 140 million company ESG scores on Moody’s Orbis database, Procurement Catalyst and Credit Catalyst platforms, via an application programming interface (API), or leverage the ESG Score Predictor model with their in-house data to score their portfolios. “Alongside portfolio analysis and analyst-driven SME assessments, the ESG Score Predictor adds a unique, integral component to our comprehensive suite of cutting-edge solutions to help investors and companies leave no stone unturned when identifying and analysing ESG risks and opportunities,” said Andrea Blackman, Global Head of Moody’s ESG Solutions.

 

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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