ESG Investor’s weekly round-up of news on technology and tools in the sustainable investing sector, including Impact Investing Institute, ESG Book, SIX, Sustainalytics, ISS ESG, Marsh, Deutsche Börse and AirCarbon Exchange.
Non-profit Impact Investing Institute (III) has released a resource package designed to support endowments to transition to an impact investing approach. The package includes a practical handbook, an explanatory legal paper and a set of case studies. Definitions of impact investing are provided along with information about legality and financial returns. Case studies include Ceniarth, Treebeard Trust, Friends Provident Foundation, Guy’s and St Thomas’ Foundation and Esmée Fairbairn Foundation. The package is aimed at foundation trustees and their investment committees; foundation leaders, CEOs and their teams; investment advisors and managers; and impact investing asset managers. In releasing the resource package, III hopes to dispel the perception that impact investing means concessionary returns, is expensive and complex to deliver, and lacks suitable choice.
Metrics from the Institutional Limited Partner Association’s ESG Data Convergence Project have been made available on ESG Book, the sustainability data source developed by Arabseque. The move enables private companies to disclose sustainability data on ESG Book via the Project’s standardised metrics. Private equity general partners and limited partners will gain access to performance-based, comparable sustainability data from private companies. Launched in September 2021, the ESG Data Convergence Project is supported by more than 100 private equity firms representing US$8.7 trillion in AUM and more than 1,400 private companies. Through ESG Book, private companies are able to disclose information against the Project’s reporting template, as well as on a wide range of sustainability frameworks globally. They can also map their data against project’s key metrics, alongside other frameworks including the Sustainability Accounting Standards Board, and Global Reporting Initiative.
Swiss financial market infrastructure and data company SIX is now providing EU Taxonomy and other ESG data from ESG research, ratings and data company Sustainalytics. This is the first third-party specialist ESG data provider to be included on SIX’s distribution channels. The new data will enable SIX to provide extensive ESG data sets for the EU Taxonomy and the Sustainable Finance Disclosure Regulation (SFDR). The core of the SFDR data set is Principal Adverse Impact information. Additionally, SIX now offers Sustainalytics’ ESG Risk Ratings, which help firms to make more informed investment decisions and provide advice for end-clients. These ESG Risk Ratings measure a company’s exposure to industry-specific material ESG risks and how well a company is managing those risks. SIX aims to aggregate and distribute data from renowned ESG data providers around the globe, as well as from a large number of manufacturers of financial products, such as fund managers.
ISS ESG, the responsible investment arm of Institutional Shareholder Services, has launched the ISS ESG Water Risk Rating. The rating helps institutional investors to identify and manage freshwater-related risks in portfolios, build freshwater-focused portfolios, funds and indices, and supports water-related stewardship and engagement programmes. Users are given a holistic and granular assessment of a company’s exposure to and management of freshwater risk based on 11 data points. A distinct methodology for assessing companies’ freshwater risk exposure and management provides an aggregated score based on two pillars – water risk exposure calculation and water risk management performance score. Initial coverage is of around 7,400 companies globally, and is powered by ISS ESG’s Corporate Rating, Norm-Based Research, SDG Solutions Assessment, as well as data on baseline water stress from the World Resource Institute Aqueduct Water Risk Atlas.
Insurance broker and risk advisor Marsh has launched ESG Risk Rating, which draws on ten internationally recognised ESG standards and frameworks, including the Global Reporting Initiative, Sustainability Accounting Standards and Task Force on Climate-related Financial Disclosures. The ESG Risk Rating scores insurance firms’ performance across 18 ESG themes. On completion of the free assessment, the insurer receives an overall ESG risk score, as well as a rating for each ESG component. The results will enable users to identify their most critical sustainability and climate-related risks and opportunities to further develop their ESG strategies. The rating also can be shared with external stakeholders.
Deutsche Börse, operator of European Energy Exchange (EEX) has made an undisclosed investment in voluntary carbon market AirCarbon Exchange (ACX) in a move designed to accelerate the development and scaling of voluntary carbon markets. The two companies will work to provide a streamlined solution across the spot and futures carbon markets. ACX’s exchange platforms in Singapore, Brazil and other upcoming markets will act as a connecting point between the fragmented carbon origination market and EEX’s well-developed emissions trading platform.
