ESG Investor’s weekly round-up of news on technology and tools in the sustainable investing sector, including the Value Reporting Foundation, ICE, Moody’s ESG Solutions, Green Finance Institute, Sustainalytics and Verity.
The Value Reporting Foundation (VRF) has released a set of Integrated Thinking Principles, which aim to provide a structured approach for creating an environment within organisations to support effective decision-making and long-term enterprise value. Integrated thinking is a management philosophy for strategically assessing the resources and relationships the organisation uses or affects, and the dependencies and trade-offs between them, especially in the context of organisational decision-making. The VRF’s prototype Principles are designed to be embedded into business models and applied across key activities. The six Principles, which are interconnected, are implemented on three levels: the first comprises questions to the board and CEO on how widely each Principle has been adopted across the organization; the second offers the opportunity to test how deeply the Principles have been embedded into the organisation; and the third consists of strategic management tools, practices and processes to bring integrated thinking to life. The VRF – formed earlier this year from the merger of the International Integrated Reporting Council (IIRC) and the Sustainability Accounting Standards Board (SASB) – also published updates to SASB’s Asset Management & Custody Activities, Metals & Mining and Coal Operations Industry Standards. Last month it was confirmed that the VRF would be consolidated into the International Sustainability Standards Board (ISSB), founded by the IFRS Foundation to develop global sustainability reporting standards. “As we prepare for this consolidation, we continue to advance work on our three key resources: the Integrated Thinking Principles, Integrated Reporting Framework and SASB Standards. We strive to ensure these resources are as useful as possible to the markets they were designed to serve,” said VRF CEO Janine Guillot.
Data, technology and market infrastructure provider Intercontinental Exchange (ICE) has acquired risQ and Level 11 Analytics, providers of data-driven technologies for managing climate change risk and addressing social inequalities in US fixed income markets. The two companies, which have ownership and senior staff in common, provide climate risk analytics and investment decision-making tools, including climate risk and ESG data for the US municipal bond, mortgage-backed securities and real estate markets. “Understanding and measuring climate risk, and its impact on investment decisions, continues to be a growing area of focus for our customers,” said Lynn Martin, President of Fixed Income and Data Services at ICE. “risQ and Level 11 Analytics provide unique data sets and platforms, and their strong analytical background and focus on ESG factors, real estate and the mortgage markets, serve as fertile ground for creating innovative products that offer more insights for our customers.” ICE and risQ previously worked together on ICE Climate Risk, launched last year, which allows investors in the US municipal bond market to incorporate climate risk into project and investment decisions. risQ recently introduced Social Impact Scores to the ICE offering, allowing users to quantify the potential social impact of investments in the municipal bond market. Level 11 Analytics developed much of the underlying geospatial technology and analytics and, together with risQ, offers ESG and economic data on physical land use and the financial assets tied to it in the mortgage-backed securities market.
Moody’s ESG Solutions has launched Temperature Alignment Data, a solution which assesses how companies’ emissions targets align with global temperature benchmarks and their progress in meeting those targets. Currently covering 4,400 of the largest companies globally, Temperature Alignment Data can be used by banks and asset managers to quantify and monitor corporate emissions targets and the temperature alignment of their portfolios, while companies can benchmark their emissions targets against peer targets and market expectations. “Rising concern about the effects of climate change has increased pressure on investors, companies, and governments to contribute to the energy transition and demonstrate measurable action toward achieving emissions targets,” said Andrew Grant, Vice President – Climate Solutions in Moody’s ESG Solutions Group. “Moody’s ESG Solutions’ Temperature Alignment Data provides greater transparency on whether companies’ net zero commitments are in line with what’s required to keep warming below 1.5°C, highlighting that there is critical need for increased ambition.”
The Green Finance Institute has launched an online knowledge resource, GFI Hive, designed to share information and insights on how to increase private investment in nature restoration and nature-positive outcomes in and for the UK. With initial funding from the Esmée Fairbairn Foundation, GFI Hive will share technical knowledge and best practice on investing in nature and nature-based solutions to support the mobilisation of private capital into the sector. This will include in-depth case studies of successful transactions (both domestic and international), research reports, insights, podcasts, webinars and events. GFI Hive will also convene the finance sector, government, business, academia, land managers and other environmental stakeholders to identify barriers and co-design solutions for scalable and replicable private investment in nature in the UK. A recent report, The Finance Gap for UK Nature, highlighted the need for private investment in nature in addition to public sector funding and identified an estimated £44 billion to £97 billion funding gap requirement to meet the UK’s key nature-related goals over the next decade.
Sustainalytics’ ESG Research and Ratings reports are now available through the Verity Platform. Verity is a provider of research management software, data and analytics formed by the merger of MackeyRMS and InsiderScore. Further enhancing the Verity Platform’s existing ESG capabilities, the addition of Sustainalytics’ ESG Risk Ratings and Controversies Research reports offer Verity users a wide range of ESG information including ESG ratings, trends, actionable controversies, analytics, and more. Last year, Verity introduced ESG Scorecards, enabling users to streamline investment selection, monitoring and reporting for ESG-focused portfolios. “The addition of Sustainalytics’ insights combined with our ESG Scorecards enables our customers to more effectively incorporate ESG considerations into their portfolios, said Verity CEO Andrew Robson.