ESG Investor’s weekly round-up of news on technology and tools in the sustainable investing sector, including S&P, Sustainable Fitch, Moody’s, FactSet, Alveo and APX.
A new family of climate-focused market benchmarks, the S&P Net Zero 2050 Carbon Budget Indices, has been launched by index provider S&P Dow Jones Indices in collaboration with Sustainable1, S&P Global’s single source for ESG intelligence. According to S&P, the indices’ design is based on the most recent Intergovernmental Panel on Climate Change report. The S&P Net Zero 2050 Carbon Budget Indices’ methodology enables indices within the suite to allocate and adjust a carbon budget across their constituents based on the year of the indices’ launch. For the series of 2022 vintage indices, this means an initial 25% cut in volumes of emissions as well as approximately 10% yearly emissions reduction based on their published index methodology. The series, which utilises climate data from S&P Global Sustainable1, complements S&P Dow Jones Indices’ existing suite of climate and ESG indices, and provides an alternative tool and index-based approach to measure climate and environmental-related risks and returns in investment portfolios.
Ratings provider Sustainable Fitch has launched ESG Scores for Leveraged Finance, a scoring system which allows granular assessment of ESG for leveraged finance entities and labelled issuance. Sustainable Fitch’s ESG Entity Scores are an independent view on a leveraged finance issuer’s overall impact on environment and society and the effectiveness of its governance. The ESG Framework Scores are a view on the use of proceeds or soundness, as well as the monitoring and tracking, of defined key performance indicators. To date, Sustainable Fitch has ESG leveraged finance scores on more than 430 individual borrowers in the European market, providing an ESG view on more than 75% of the portfolio in an average Fitch-rated European collateralised loan obligation (CLO). Sustainable Fitch is also extending provision of its ESG Scores to the North American CLO market, and is on target for 80% of US CLO portfolio coverage by end-2Q23.
Moody’s has launched its ESG Insurance Underwriting Solution for P&C Insurers, which enables customers to integrate ESG factors into commercial underwriting and portfolio management activities. The solution leverages the underwriting expertise of global specialty reinsurer Chaucer Group with Moody’s ESG and wider integrated risk modeling capabilities. It combines data on public and private companies with a flexible and transparent ESG assessment framework developed with Chaucer to generate ESG indicators and scores that allow insurers to build their own view of ESG risk. “As insurers are seeking to measure the ESG impact of their portfolio, alongside the assessment of traditional insurance risks, this new offering is a great example of how our integrated risk-assessment strategy helps meet our customers’ needs,” said Colin Holmes, General Manager of Insurance at Moody’s Analytics.
Following the integration of FactSet’s ESG content into Alveo’s data management platform, the firms are combining their capabilities to provide customers with integrated solutions that more easily deliver FactSet content into workflows and databases. The collaboration aims to minimise the time needed to onboard new data sets and business applications to help customers optimise the full range of FactSet’s data. This includes FactSet’s ESG and wider corporate actions services, as well as FactSet’s Concordance for security identifiers and legal entity recognition. With the help of Alveo’s data management solutions, FactSet content can be cross-referenced and linked with client data sets or content sourced from other data vendors within a client’s business process. Jonathan Reeve, SVP, Head of Content and Technology Solutions at FactSet, said: “We are pleased to work with Alveo’s cloud-based data management so that clients can cross-reference and integrate our content and blend it with their internal data to slash the time required to onboard new data sets, reports, and business applications.”
APX, an environmental commodities technology solutions provider, has launched ESGclear, a solution that provides transparency for transactions that require ESG reporting, financing, and mitigation across supply chains. “Reporting requirements are becoming more prevalent and corporates must prove ESG claims at the transaction level,” said APX CEO Joe Varnas. “Evidencing compliance requires a centralised corporate ledger, and ESGclear empowers participants to capture transactions with ESG-linked attributes, proving progress toward increasingly aggressive goals.” Chief Commercial Officer Brian Fellon said: “Whether your firm is voluntarily reporting Scope 3 emissions or preparing for coming regulatory compliance, ESG claims must be proven for every transaction. As opposed to the siloed spreadsheets that have historically hampered progress on this front, ESGclear provides a centralised, interconnected corporate ledger to facilitate accountable, transparent reporting.” APX was acquired last month by global market-infrastructure platform Xpansiv.