ESG Investor’s weekly round-up of news on technology and tools in the sustainable investing sector, including Bloomberg, Normative, Sugi, ISS ESG, FE fundinfo and MSCI.
Bloomberg has developed new Global Aggregate Green, Social, Sustainability Bond Indices, which will provide new benchmarks for bonds that finance projects with environmental and social benefits. The indices utilise the flagship Bloomberg Global Aggregate Index, the Bloomberg Sustainable Finance Group’s green, social and sustainability bond indicators, and fields that show alignment with the International Capital Market Association bond principles and guidelines. Bloomberg Terminal clients will be able to access underlying bond documentation, such as use of proceeds allocation to the eligible project categories and subcategories, as well as alignment to the UN Sustainable Development Goals. Jonathan Gardiner, Bloomberg Indices’ Sustainable Indices Product Manager, said: “Our new Global Aggregate Green, Social and Sustainability Bond Indices incorporate the research of Bloomberg’s ESG and fixed income data teams to deliver a diverse set of indices to meet the varied needs of the investment community exploring this growing market.” Bloomberg has also released new Implied Temperature Rise Metrics, which look to help determine how companies and portfolios align with climate risk goals. Olivier Wibo, Bloomberg’s Product Manager for Sustainable Finance Solutions, said: “By embedding the widely recognised science-based approach used by the SBTi, Bloomberg is able to provide reliable metrics investors can trust to develop investment strategies that align capital allocation with climate objectives.”
Normative, a Swedish carbon accounting engine, and the Exponential Roadmap Initiative are developing a new emissions scoring framework. This framework will provide enterprises with a scientific, standardised, and comparable way of measuring progress toward net zero emissions, serving as an open-source public framework developed with support from expert advisors across academia and business, including the Exponential Roadmap Initiative, Nordea, and Planet Mark. The framework will condense businesses’ current carbon performance into a single score, which is determined based on the accuracy of the data used for the emissions calculations and the business’s progress toward net zero. The methodology is based on four core principles: net zero focus, completeness, reliability, and transparency. Kaya Axelsson, an Advisor on the project and Policy Engagement Lead at Oxford Net Zero, said: “As net zero target dates approach, we will need ways to measure and incentivise the accuracy of data alongside reported progress, or we risk gravely missing the mark on our global goal to limit temperature to 1.5°C.”
UK-based green fintech firm Sugi has expanded its impact data coverage to include fixed income investments. The expansion reflects its long-standing growth plans and a shift in the market to look beyond the impact of equities. To calculate fixed income impact, the firm has built on its existing methodologies which align with guidelines published by the Partnership for Carbon Accounting Financials (PCAF) and the Task Force on Climate-related Financial Disclosures (TCFD). Josh Gregory, Sugi’s CEO and Founder, said: “Adding fixed income investments to our coverage is part of our ongoing commitment to bringing transparency to green investing. By giving investors a fuller picture of their impact, we want to help them make genuinely greener choices when they manage their portfolios.”
ISS ESG, the responsible investment arm of Institutional Shareholder Services, has released methodology enhancements to its Governance QualityScore (GQS) scoring solution for global institutional investors. The release is the largest methodology enhancement of Governance QualityScore to date. It includes the introduction of 23 new factors, while still applying 52 existing factors, to companies based in new jurisdictions to increase global comparability of best governance practices. These new factors, spread across seven topical areas, include information security, emerging risk oversight and diversity, equity, and inclusion.
London-based financial services firm FE fundinfo has expanded its provision of European ESG data to MSCI, the global data, analytics and research services provider. Through the agreement, MSCI will gain complete access to FE fundinfo’s European ESG Template (EET) data, which plays a “critical role for financial market participants”. The EET is an industry template used by asset managers, asset owners and financial advisers to comply with various European regulations such as the Sustainable Finance Disclosure Regulation (SFDR), Markets in Financial Instruments Directive (MiFID II) and the Insurance Distribution Directive (IDD). The collaboration will allow MSCI’s ESG and climate clients to pair FE fundinfo’s whole of market EET data with MSCI’s ESG Fund Ratings dataset. Philipp Portmann, FE fundinfo’s Head of Business Development and Strategy, said: “There’s a long way to go before standardised disclosures and integrating sustainability factors at an entity, service and product level are the norm for the industry. However, this agreement sets a great example of how the coming together of market participants can bring about greater investor transparency through the democratisation of data, easing accessibility and streamlining distribution.”