ESG Investor’s weekly round-up of news on technology and tools in the sustainable investing sector, including Persefoni, ISS ESG, BNPP AM, Ortec Finance, ESG Book, MSCI, SIX, Urgentem and Likvidi.
Climate reporting technology company Persefoni has launched an inaugural set of Climate Trajectory Modelling (CTM) and Climate Impact Benchmarking (CIB) modules. CTM allows companies to use Persefoni’s propriety carbon accounting, reporting and management software to set emissions reduction goals aligned with the Science Based Targets initiative or customised to the firm’s requirements. CIB utilises environmental disclosure platform CDP’s emissions data to prioritise investment portfolio allocations and provide investors with transparency and access to carbon investment data not previously available. The modules aim to accelerate carbon accounting and aid businesses and investors in meeting stakeholder and regulatory carbon disclosure requirements. Kentaro Kawamori, Persefoni’s CEO, said: “If we want all businesses and investors to reduce carbon emissions, we must use technology and data to make the process easier. Most organisations want to reduce carbon emissions, but the barrier to entry can be high and complicated. We are solving this by delivering intuitive, user-friendly, solutions so that climate disclosures can be measured and disclosed as accurately as financial disclosures.”
ISS ESG, the responsible investment arm of the Institutional Shareholder Services (ISS), has launched a Modern Slavery Scorecard. The scorecard enables investors to identify, evaluate and prioritise modern slavery risks in their global portfolios and support their modern slavery and chain related reporting. It provides a holistic assessment of modern slavery risks in businesses operations and supply chains, preparedness to address those risks, and links to modern slavery controversies. The scorecard is powered by data and insights from three ISS ESG solutions: the ESG Corporate Rating, Norm-Based Research and the ESG Country rating, assessing 25 quantitative and qualitative factors developed by ISS ESG’s modern slavery and human rights specialists. As of June 2022, there are 7,400 issuers globally covered by the Modern Slavery Scorecard. Dr Maximilian Horster, Head of ISS ESG, said: “With human rights transparency and due diligence regulatory frameworks evolving rapidly, ISS ESG’s Modern Slavery Scorecard helps investors improve their risk management and stewardship of this important area.”
BNP Paribas Asset Management (BNPP AM) has partnered with Danish FinTech firm Matter to launch SDG Fundamentals, a revenue-alignment data solution. The new dataset will enable investors to analyse the extent to which company revenues are aligned with the targets of the UN Sustainable Development Goals (SDGs). SDG Fundamentals is based on a propriety SDG taxonomy using a granular revenue breakdown database. The data covers more than 50,000 issuers providing insights into SDG alignment and misalignment through an analysis of their products and services and will be available to the sustainable investment market through Matter. Bérénice Lasfargues, BNPP AM’s Sustainability Integration Lead, said: “Understanding the extent to which companies’ core business revenues are aligned to the SDGs […] is the next frontier of sustainability analysis. Our methodological work with Matter helps to break down this barrier and provides investors with actionable information on what constitutes company alignment to the targets underpinning the 17 SDG Goals. It is also part of a wider push towards increased data breadth, quality and standards through industry collaboration.”
Dutch risk management firm Ortec Finance has partnered with Arabesque’s ESG Book to provide greater access to sustainability data and insights. The partnership will allow Ortec clients to use ESG Book’s suite of metrics and data on green revenues, corporate emissions and regulatory solution. Ortec is developing an on-demand Implied Temperature Score (ITR) analytics platform for Climate ALIGN, which will be powered by ESG Book’s climate data and launches later in 2022. The platform will allow clients to access to their ITR scores across asset classes including credit, equities and private market and will be available for individual securities and at an aggregate level. Ton van Welie, Ortec Finance’s CEO, said: “The financial impact of climate risk, combined with net zero alignment, are increasingly taking centre stage in investment decision-making. By combining ESG Book’s sustainability data and technology with the models and methodologies of Ortec Finance, we are able to provide our clients with the analytics and insights that enable them to manage the increasing complexity of investment decision-making.”
Morgan Stanley Capital International (MSCI) has launched a new range of Equity Factor Models (EFM). These aim to help investors better understand the factors that drive portfolio risk and performance and feature three new factors, including a sustainability factor that measures a company’s emissions relative to its size, multiple measures to assess how a stock is priced relative to its own history, and data science and natural language processing to evaluate the relationships between different variables that impact a stock’s returns. Mark Carver, MSCI’s Head of Equity Portfolio Management and Equity Factors, said: “Investors have told us repeatedly that the new risk measures in these models, combined with the introduction of sustainability factors, are crucial for an evolving investment landscape. We are excited to introduce these innovative models and believe they enable clients to better understand the drivers of their portfolio risk and return, construct differentiated portfolios, and effectively respond to changing market dynamics.”
Swiss financial data and market infrastructure firm SIX has partnered with carbon emissions data and climate risk analytics company Urgentem to support clients in meeting climate-related requirements. These requirements include regulatory reporting of emissions data and tracking alignment to net zero and climate goals. The partnership will provide SIX’s clients with access to Urgentem’s emissions data set, which includes carbon emissions data for over 5,000 global companies with additional modelled data available for more than 30,000 securities, as well as emission reduction targets and temperature score data sets. Shai Popat, SIX’s Financial Information Managing Director of Content and Product Management, said: “Climate is a key component of ESG considerations for businesses, and one that is set to increase in importance as governments and financial institutions navigate the transition to net zero. We welcome this new partnership with Urgentem – the benefits for our clients are two-fold. As well as providing insights to help understand regulatory trends centred on carbon emissions, the data better facilitates informed decision making of individual investors when it comes to understanding the impact of the entire supply chain.”
Likvidi, a Luxembourg-based sustainable finance firm, has announced the launch of Veriforest – a new registry for forest-based projects – in partnership with Israeli start-up Albo Climate. Veriforest will allow small- and medium-sized forest-based projects to participate in the voluntary carbon market. It will be able to accurately monitor the carbon sequestration and production of forestland, making carbon credits more tangible, by combining Albo’s AI and satellite capabilities. The AI technology applies propriety deep-learning algorithms to analyse satellite imagery and validate carbon credits, as well as assist in preventing the degradation of associated credits from forest fires, illegal logging and project disintegration. Dr Jacques Amselem, Albo Climate’s CEO, said: “It’s a pleasure to work with our fellow passionate technologists at Likvidi and to be able to bring our satellite imagery analysis products to enhance the Veriforest solution that Likvidi is building. We look forward to years of partnership ahead.”