This Week’s Tech and Tools News: MSCI Offers ESG Reporting Solution for Banks

ESG Investor’s weekly round-up of news on technology and tools in the sustainable investing sector, including MSCI, Tumelo, DSD Lab, Exabel, YoujiVest, R3 and Hope for Justice. 

Data, analytics and research services provider MSCI has developed a new solution to support banks looking to align with the European Banking Authority’s (EBA) ESG Pillar 3 prudential framework for measuring and reporting on ESG and climate-related risks. The EBA ESG Pillar 3 disclosure standards are a mandatory requirement for banks with securities traded on a regulated market of any EU member state. Banks falling under scope must report information about climate risks on four main categories: exposure to climate-related assets and assets subject to climate change-related risks, including transition and physical risks; support for counterparties through the low-carbon transition and in climate adaptation; KPIs on sustainable finance activities based on the EU taxonomy regulation; and how banks integrate ESG considerations into governance, business, strategy and risk management. Banks are required to disclose on five of the ten templates within their 2023 financial statement or as soon as possible thereafter under new EBA regulations. As well as supporting EBA-aligned reporting requirements, MSCI aims to assist banks in producing Task Force on Climate-related Financial Disclosures-aligned (TCFD) disclosures and measuring the alignment of their financial activities with the EU environmental taxonomy. Eric Moen, MSCI’s Head of ESG and Climate, said: “With this new disclosure framework in place, banks need to take urgent measures to ensure that they are meeting the regulatory requirements set out by EBA standard, as well as other region and country-specific frameworks. The new solutions from MSCI will help banks to familiarise themselves with the EBA’s expectations and their disclosure obligations.” 

UK-based financial services firm Tumelo has partnered with proxy advisors Glass Lewis, Pensions and Investment Research Consultants (PIRC), and shareholder advocacy group As You Sow to launch a stewardship partnership programme utilising the firm’s in-house technology to deliver pass-through voting to fund managers’ institutional and retail clients. The new partnership will enable both retail and institutional clients to have access to high-quality and decision-useful proxy research and allow fund managers to display their voting intentions to clients ahead of the vote. Tumelo’s technology means investors can vote at scale across their investment holdings and fund managers can continue to vote on any shares for which their investor clients have chosen not to exercise their own preference. Will Goodwin, Tumelo’s Co-Founder, said: “This partnership allows Tumelo to solve two big problems for our customers. Investors across the network are now provided with the same high-quality advice as fund managers, helping them to make informed decisions. We can also now show investors how their fund managers intend to vote in the fund ahead of it happening, allowing for greater transparency.” 

The Digitalisation of Sustainability Data Lab (DSD Lab), a collaboration between international standard-setters and data management experts focused on sustainability, introduced its Accelerator Program at COP27. DSD Lab’s founders include Capitals Coalition, EDM Council and XBRL International, with the project aiming to facilitate the exchange of data needed for statutory reporting across industries worldwide. The lab’s key objective is to make the resulting information more trusted, actionable and discoverable, in support of better sustainability decisions that lead to more positive outcomes for people, the planet and the global economy. The objectives of the DSD Lab Accelerator Program include spearheading the development of a Smart Shared Dictionary to include all ESG topics to enhance the consistency, comparability and quality of sustainability data inside enterprises and across supply chains, developing and implementing a verification and certification programme to ensure software and services can move data between systems, and introducing a global registry for identification of all entity reporting (statutory and non-statutory) to improve data discoverability. David Wray, DSD Lab’s Co-Founder, said: “Many of the costs that firms are facing are due to the disparities in the measurement of sustainability criteria and the lack of a common framework to connect and compare the data across systems. The DSD Lab will address this over the next two years and help firms reduce costs of complying with mandatory disclosures.” 

Oslo-based data and analytics platform Exabel has partnered with Chinese ESG data and analytics firm YoujiVest to launch the Youjivest Insights Platform, which aims to enhance ESG information access for China securities. The platform will provide asset managers, asset owners and hedge funds with curated insights based on YoujiVest’s ESG data on Chinese securities, displayed through dashboards, analytics, visualisations and KPI-monitoring capabilities to help enhance the integration of ESG and sustainable considerations into their investment processes and workflows. Partnering with Exabel offers alternative data vendors with a value-added presentation and monitoring layer powered by Exabel’s Al analytics, financial modelling and data science platform. Neil Chapman, Exabel’s CEO, said: “We are delighted to be partnering with YoujiVest, one of the premier providers of ESG data on the Chinese market. YoujiVest combines two areas of massive market interest, ESG and China, and we are thrilled to get the chance to help bring these insights to a wider audience.” 

Global enterprise technology and services firm R3 has partnered with anti-human trafficking NGO Hope for Justice to launch the Private Data Exchange (PDEx) pilot programme. It will enable the sharing of case data between organisations, while protecting the identities and data of vulnerable participants. Numerous different organisations working on cases of human trafficking and related services have existing pools of data, but due to the sensitive nature of the underlying data and privacy restrictions, organisations often face challenges in sharing case data directly with each other. This has resulted in limited collaboration between non-profit organisations, as well as statutory agencies, like law enforcement and government institutions, often to the detriment of efficient and effective interventions for victims and aftercare for survivors.  PDEx tackles this problem by harnessing R3’s confidential computing platform Conclave, with the technology allowing victims’ data to be uploaded via existing case management systems and then securely passed onto the Conclave platform. This will help to identify humanitarian agencies working in high-risk trafficking domains that hold corroborative records and alert them of any potential matches with a corresponding weighted match scoring system.  Tim Nelson, Hope for Justice’s CEO, said: “We are so pleased that the Private Data Exchange platform has the potential to revolutionise how the sector collaborates across borders and overcomes issues surrounding data privacy and confidentiality. For the first time, civil society, governments, UN agencies and businesses can truly collaborate to make technology a force that will help to end human trafficking.” 

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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