ESG Investor’s weekly round-up of news on technology and tools in the sustainable investing sector, including GRI, Sustainalytics, ISS ESG, CDP, Diginex, Esgaia and Normative.
The Global Reporting Initiative (GRI) has published its internationally applicable standard for coal organisations to communicate their impacts on the economy, environment and people. According to GRI, the Sector Standard for Coal (GRI 12) enables comprehensive and comparable disclosure on a range of complex and interlinked issues, including response to demands for climate mitigation, accountability for social impacts, measures to manage environmental and biodiversity impacts, closure of coal mines in accordance with just transition principles and steps to tackle corruption. Applicable for any organization in coal mining, exploration, processing, transport and storage, GRI 12 was developed by a working group that ensures multi-stakeholder and global legitimacy. This expert group includes representatives from the UNEP World Conservation Monitoring Centre, standard setters EITI and SASB, and investment institutions FTSE Russell and S&P Global. The working group emphasised climate change as the most critical issue for the sector, requiring enhanced disclosure. “More scrutiny is needed on the companies that remain in the coal sector, with accountability for their impacts. GRI’s Coal Standard reflects these challenges – not only in terms of climate change and a just transition, but across the full socio-economic and environmental spectrum. From minimising waste to corruption-free operations, GRI 12 guides companies to deliver comprehensive and comparable reporting,” said Judy Kuszewski is Chair of the Global Sustainability Standards Board, the independent entity that sets the GRI Standards. Prior to finalisation, an exposure draft of the Sector Standard underwent a global public comment period last year. GRI 12 will come into effect for reporting from January 2024.
ESG and corporate governance research, ratings and analytics firm Sustainalytics has announced enhancements to its Sustainable Finance Disclosure Regulation (SFDR) principal adverse impact (PAI) data solution. The research universe of Sustainalytics’ newest indicators, introduced in October 2021, has now been expanded to 13,000 issuers, meaning enhanced coverage for over 20 new metrics within the mandatory and voluntary PAI set. The PAI data solution enables investors to identify and understand the potential adverse impacts of investments and can be used to support a range of use cases, from investment decision-making to SFDR regulatory disclosure.
ISS ESG, the responsible investment arm of Institutional Shareholder Services, has augmented its solutions supporting investors with net zero alignment initiatives. The firm’s dedicated suite of Net Zero Solutions, which offer automated investor portfolio reporting, now includes a net zero target status tool and modelled net zero emissions trajectories. ISS ESG Issuer Level Net Zero Alignment Data can be used to identify positive and negative performing companies against individual climate related metrics. The Net Zero Portfolio Report creates an aggregated view of a portfolio’s readiness for net zero, considering current and potential future emissions, disclosure performance, fossil fuel exposure, fossil asset expansion, climate mitigating revenue and target setting. Initial coverage includes an assessment universe of the most material sectors of major developed market indices.
The Monetary Authority of Singapore (MAS) and environmental disclosure platform CDP have signed a memorandum of understanding (MOU) to promote sustainability disclosures and access to quality ESG data across the financial sector and real economy. To enable financial institutions and corporates to better measure and monitor their ESG performance and impact, MAS and CDP will collaborate to explore the exchange of information between CDP’s disclosure system and MAS’ Project Greenprint, a technology and data platform for high-quality ESG data, to enhance financial institutions’ access to ESG data. The two organisations will also work to implement capacity building programmes for corporates and financial institutions on climate disclosures.
Diginex, a SaaS-based sustainability solutions provider, has partnered with Reckitt and Coca-Cola to launch a tool to improve human rights due diligence along the corporate supply chain. Using a continuous process of data collection and multi-stakeholder engagement to monitor working conditions, DiginexLUMEN gives businesses “unprecedented insight” into suppliers’ risks related to labour exploitation and forced labour, offering a robust governance and screening process, multilingual worker voice surveys, algorithm-based risk scoring and ESG reporting formats. Stemming from an initial partnership between Diginex and Coca-Cola focused on responsible recruitment in Middle East countries, DiginexLUMEN was then developed and scaled through financial and technical support provided by Coca-Cola and Reckitt.
Esgaia, a startup offering institutional investors SaaS-based ESG engagement tracking, has received funding from Nordic venture capital firm Wellstreet’s US$40 million Fintech Fund 1. Investors can use Esgaia’s platform to record and coordinate engagement activities, and to advance stakeholder reporting using automated statistics for both entity and product-level disclosures. The fund is primarily targeting B2B infrastructure plays in the finance sector, specifically fast-developing technologies and startups that help banks and other financial institutions adapt to new market standards. It is backed by top executives from leading Nordic banks and fintech companies including Avanza, Collector, Handelsbanken, Swedbank, Northmill, Resurs and Klarna.
Normative, a Stockholm-based provider of carbon emission accounting solutions, has launched a carbon calculator, developed with support from Google.org and available for free through the UN-backed SME Climate Hub. The calculator helps SMEs measure their emissions and identify hot spots, establishing a baseline towards halving emissions before 2030 and reaching net zero by 2050. Businesses input easily accessible data into the Business Carbon Calculator – such as the size of their facilities or their spend on electricity, heating, and petrol – using a simple-to-use form, which generates a footprint that can be addressed via tools and incentives on the SME Climate Hub. The Business Carbon Calculator was developed with support from a team of 12 Google.org Fellows, comprising software engineers, UX designers, and product managers, who supported Normative full-time pro bono for six months.