ESG Investor’s weekly round-up of news on technology and tools in the sustainable investing sector, including Nasdaq, Sustainalytics, UNEP FI, AxiomSL, JP Morgan, OpenInvest.
Global exchange operator Nasdaq has launched an ESG Data Hub which supplies investors with sustainability-related data sets from seven partner firms. Nasdaq said the initiative responded to growing demand for specialist, high-quality ESG data. The new platform connects the investment community with expert-led ESG data sets, covering diversity, carbon emissions, green bonds, and more, “providing detailed and tangible intelligence” on companies’ ESG profiles, the firm said. All the data available via the platform is linked to the UN’s Sustainable Development Goals, said Nasdaq. Launch partners include Equileap, which provides data and insights on gender equality, biodiversity experts Ecogain, and reputation-focused data science firm RepRisk. Sustainability ratings agency Inrate provides ESG Data Hub with insights on carbon emissions, Upright quantifies firms’ net impacts, Cleantech focuses on renewable technologies and Munich Re provides reinsurance, primary insurance and insurance-related risk solutions, specifically relating to climate risk. ESG Data Hub joins Nasdaq’s suite of products aimed at supporting sustainable investment decisions, alongside its Sustainable Bond Network Investor Portal, which provides access to standardised and consolidated data, allowing investors to generate impact reports, run allocation reports and find new sustainable investments.
ESG research, ratings, and data provider Sustainalytics has unveiled its EU Taxonomy Solution, designed to provide institutional investors with detailed insights into the environmentally sustainable activities of companies, based on the EU Taxonomy framework. Sustainalytics’ EU Taxonomy Solution shows activity- and company-level alignment to the climate change mitigation objective of the Taxonomy. Investors can leverage the solution to fulfil regulatory obligations, with the first reporting requirement set to take effect on January 1, 2022. Morningstar-owned Sustainalytics said the new solution could also be used for portfolio management and reporting, company screening, product and fund construction and engagement with firms that do not comply with the ‘do no significant harm’ criteria or ‘minimum safeguards’ criteria. The solution contains new activity-based research, which evaluates the proportion of a company’s taxonomy-eligible revenues, capital expenditures and operational expenditures. “While the EU Taxonomy requirements are still being defined, investors have a comprehensive solution to identify environmentally sustainable activities, construct credible sustainable investment products, and leverage it for a variety of other investment purposes,” said Anne Schoemaker, Sustainalytics’ Associate Director of Product Strategy and Development, adding that the solution would be developed to take account of future regulatory changes.
The United Nations Environmental Programme Finance Initiative (UNEP FI) has added to its suite of impact analysis solutions with the Real Estate Impact Analysis Tool and the Investment Portfolio Impact Analysis Tool. They join the Portfolio Impact Analysis Tool for Banks and the Corporate Impact Analysis Tool, launched in 2020 and developed to enable financial institutions to holistically identify and assess impacts associated with their portfolios, clients and investments, based on UNEP FI’s holistic impact methodology. The Investment Portfolio Impact Analysis Tool complements the Portfolio Impact Analysis Tool for Banks, helping to enable signatories to the Principles for Responsible Banking to meet their requirements under Principle 2 on impact analysis. While the latter focused on consumer, business, corporate and investment banking, the latter allows the holistic impact methodology to be applied consistently across the bank. The Real Estate Impact Analysis Tool builds on the UNEP FI Positive Impact Real Estate Investment Framework Model Framework, developed by the UNEP FI Property Working Group in 2018, based on the UNEP FI Impact Radar. It enables single asset analysis or fund/portfolio level analysis, and is applicable for both new developments and exiting assets.
AxiomSL, a provider of regulatory reporting and risk management solutions, has launched an ESG solution to automate compliance with new sustainability and social impact reporting requirements being developed by the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA) and other regulatory bodies. The solution standardises the process of integrating ESG data attributes, such as counterparty exposures, climate risk reference data and social impact data, with existing financial reference data in a common data dictionary to streamline ESG reporting for financial institutions. The EBA’s draft technical standards provide a framework for disclosing how climate change may exacerbate other risks within institutions’ balance sheets, how institutions are mitigating those risks, and their green asset ratio on exposures financing taxonomy-aligned activities, such as those consistent with the Paris agreement goals. These disclosure requirements are expected to be applicable starting in June 2022. ESMA has also begun to develop a taxonomy for financial institution ESG reporting. To meet these requirements, financial institutions will need to be able to consistently and accurately disclose their climate-related exposures in addition to traditional financial risk data. “By integrating climate risk and social impact data with our existing financial data in a common data dictionary, we are making it possible for institutions to automatically capture and report ESG exposures in the same manner in which they’ve been reporting traditional financial risks, bringing some much-needed rigour and standardisation to ESG reporting,” said Alex Tsigutkin, Founder and CEO, AxiomSL.
US financial services group JP Morgan is to acquire OpenInvest, a fintech that helps financial advisers to build, manage and report on ESG-based investments and portfolios. The company, funded by investors including Andreessen Horowitz, Y Combinator and QED, will retain its own brand and be integrated into JP Morgan’s Private Bank and Wealth Management client offerings. “Clients are increasingly focused on understanding the ESG impact of their portfolios and using that information to make investment decisions that better align with their goals,” said Mary Callahan Erdoes, CEO, JP Morgan Asset & Wealth Management. This announcement follows JP Morgan Asset Management’s acquisition of 55ip, a fintech focused on “delivering tax-smart investment strategies” through model portfolios. JP Morgan intends leverage OpenInvest’s ESG capabilities with 55ip’s investment strategies to deliver customised solutions to Private Bank and Wealth Management clients.