This Week’s Tech and Tools News: Morningstar Introduces EU Climate Indexes

ESG Investor’s weekly round-up of news on technology and tools in the sustainable investing sector, including Morningstar Indexes, Impact Cubed, Eka, Persefoni, TP ICAP, Speedwell and All Street.

Morningstar Indexes, a unit of the investment research provider, has introduced the Morningstar EU Climate Indexes to help investors progress toward meeting EU Climate Transition Benchmarks (CTB) and Paris-Aligned Benchmarks (PAB) requirements. The index allows investors to target companies within a broader market index that are on track to decarbonise in line with Paris Accord targets, while minimising tracking error. The series combines Morningstar core benchmarks with carbon emissions data and Carbon Risk Ratings from the firm’s Sustainalytics business. “As we approach the start of COP26, global investors are more focused than ever on climate change and asking for more advanced measures to track progress in meeting their commitment to carbon neutrality. Our new EU Climate Indexes, which harness the power of Morningstar through our Indexes and Sustainalytics teams, combined with focused ESG education and insights via Morningstar’s EU Sustainable Finance Action Plan Resources help clients address the complexity of climate policy in order to meet regulatory requirements and create more focused investment strategies,” said Tobias Sproehnle, Head of Morningstar Indexes. This launch contributes to Morningstar’s growing investment in market indexes and data to support global investors. In September, Morningstar acquired Moorgate Benchmarks, a Europe-based global provider of index design, calculation and administration.

Impact Cubed, an ESG data and sustainable investment solutions provider, has launched its EU Regulatory Solution to support asset managers complying with Sustainable Finance Disclosure Regulation (SFDR) principal adverse impact indicators (PAIs) requirements. The solution aims to support investors by providing full transparency of PAIs for over 40,000 companies and 190 sovereign issuers or countries. “The regulations are broad and much more complex than they first appear. We have leveraged our expertise using objective ESG factor data to build rigorous PAI datasets for compliance reporting [and created] portfolio analytics so investors can also understand the implications of the regulations on their investment strategies to create portfolios with greater impact,” said Antti Savilaakso, Head of Research at Impact Cubed.

Cloud-based solutions provider Eka has launched its Eka Sustainability and ESG reporting solution to help enterprises comply with operational and compliance best practices. The solution enables companies to track, measure and report against relevant industry standards and regulations. For example, carbon emissions can be visualised in prebuilt sustainability report to monitor a company’s use of energy and resources. “As the world shifts towards a sustainable future, we are all recognising the pressing need to embed ESG and Sustainability discipline into our business operations. With the launch of Eka Sustainability and ESG reporting solution we are empowering enterprises with their sustainability disclosures and helping them address opportunities and risks that affect their operations, and most importantly their reputation,” said Manav Garg, Founder and CEO and Eka.

Persefoni, the SaaS-based carbon accounting and management platform, has raised US$101 million in its Series B financing round for its free carbon accounting product. Prelude Ventures and The Rise Fund led the round with first-time participation from Clearvision Ventures, Parkway Ventures, Bain & Co, EDF Group through its corporate venture arm EDF Pulse Holding, and Sumitomo Mitsui Banking Corporation. This brings total capital raised to US$114.2 million. With its core offering fully auditable and compliant with both the Greenhouse Gas Protocol and the Partnership for Carbon Accounting Financials (PCAF) methodologies, four of the ten largest global private equity firms and four of the world’s 20 largest banks now use Persefoni to calculate and disclose their financed emissions footprint. “Persefoni is purpose-built to support the most complex use-cases across carbon footprinting and financed emissions calculations for global enterprises. We’re very excited to bring that innovation to a much larger set of the market with the announcement of our free-tier product, as Persefoni works to democratise carbon accounting to all companies around the globe,” said Kentaro Kawamori CEO and Founder of Persefoni.

Global markets infrastructure and data solutions provider TP ICAP and Speedwell, an environmental risk management solution provider, have partnered to launch the ICAP-Speedwell Climate Index. Using global weather data, the index is able to track climate change, giving market participants real-time information to help them make investment and hedging decisions and manage climate-related financial risks. “The introduction of the index has the ability to dramatically change how people calculate the financial impact of global climate change, providing comprehensive data to quantify the impact of future temperature changes for the first time. Climate change is a significant financial risk and quoting markets in this way is an important step in not only measuring that risk, but also understanding the cost of climate change as we move towards a low-carbon economy,” said Nicholas Ernst, Managing Director of Weather Markets at TP ICAP.

FinTech company All Street Research has announced the launch of Sevva, a universal AI-powered ESG ratings platform. Developed in collaboration with the University of Cambridge, Sevva’s real time ratings and sustainability analysis is based on the UN Sustainable Development Goals (SDGs), covering 70,000 publicly-listed companies globally. Its AI technology scans through all publicly available ESG data across these companies in order to them calculate their ratings. Investment professionals are then able to access the underlying sources used by Sevva to generate these scores. “The upcoming COP26 must see world leaders affirm that building back better requires both aggressive climate objectives and sustainable development targets. There are 250 million companies in the world that can make this happen. Only AI can provide this scale of ESG assessment. We are extremely proud that All Street will be able to play a leading role in bringing the power of AI to help solve some of humanity’s greatest challenges,” said Emanuela Vartolomei, Founder and CEO of All Street.

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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