This Week’s Tech and Tools News: Willis Towers Watson Offers Climate Transition Indices

ESG Investor’s weekly round-up of news on technology and tools in the sustainable investing sector, including Willis Towers Watson, Qontigo, ICE, GoldenSource, Persefoni, Patch, Climate Solutions, Moody’s, LexisNexis.

Investment consultants Willis Towers Watson have partnered with index provider Qontigo to launch a family of climate transition indices which use a “next generation methodology” to quantify the impact of a Paris-aligned climate transition on equity valuations. The STOXX Willis Towers Watson Climate Transition Indices (CTI) are designed to help investors, governments and companies to manage risk, capture opportunities in their portfolios, align with the goals of the Paris Agreement and work towards net zero targets. According to the partners, the indices support a sophisticated approach to risk management which looks beyond carbon emissions, by conducting a forward-looking, bottom-up evaluation of transition risk and opportunity for each company. A proprietary Climate Transition Value at Risk (CTVaR) measure analyses the impact on projected company cashflows of moving from a ‘business as usual’ scenario to a world where emissions pathways are fully aligned to the goals of the Paris Agreement. By incorporating climate risk explicitly, this approach allows investors to allocate in a robust, transparent, and low-cost manner towards firms that will build – and benefit from – a future global economy that values and manages climate risks. AMX, an affiliate of Willis Towers Watson, is launching a UCITS fund which will track the STOXX Willis Towers Watson World Climate Transition Index. Stewardship provider EOS at Federated Hermes will provide voting and engagement services for the fund.

ICE’s ESG Reference Data service is now integrated with GoldenSource ESG Impact, offering users detailed ESG information and analytics that support investment decisions, risk management and regulatory reporting. With the Sustainable Finance Disclosure Regulation’s principal adverse impact (PAI) indicators being key for entity- and product-level reporting, the integration of ICE’s data with GoldenSource’s calculation functionality provides investment managers with speedy access to critical ESG metrics. Seamless integration with data from ICE’s Business Entity Service, integrated into GoldenSource ESG Impact via connections to the GoldenSource EDM platform, will help ensure that when ESG data is lacking for an investee company, users can backfill from companies in the same entity hierarchy. “ICE ESG Reference Data contributes a key dataset to service the multitude of ESG-related tasks and decisions that investment firms are facing. Its breadth and depth of coverage provides insight and comparative information on a broad range of companies,” said Volker Lainer, Head of Connections and Regulatory Affairs at GoldenSource. ICE’s ESG Reference Data service is part of data, technology, and market infrastructure provider Intercontinental Exchange.

SaaS-based carbon accounting and management platform Persefoni is partnering with API-first carbon removal marketplace Patch to launch the Zero Commission Offset Marketplace (ZCOM), which will enable climate-conscious users to purchase certified, long-term offsets. The platform offers commission-free access to carbon offsets in small increments and with no minimum purchase requirement, in a bid to democratise carbon markets “that were previously the exclusive domain of the largest companies and brokerages”. Persefoni said ZCOM makes it significantly easier for companies to add carbon removal to their core business processes, aggregating verified and unverified carbon-removal supply, and offering turn-key access. This also enables Persefoni customers to seamlessly neutralise any unavoidable or outstanding emissions through a broad range of project types, including biochar, bio-oil, mineralization, and forestry preservation. Users will also be making meaningful contributions to the long-term scalability of nascent, negative emission technologies, the firm said. “Tackling climate change is a fight won by the masses, and the Offset Marketplace brings us closer to lessening the devastating impact we see every day.” said Persefoni CEO Kentaro Kawamori.

Climate Solutions, the climate-focused capital raising and strategic advisory firm, has created an online marketplace for institutional investors seeking climate and ESG-focused investment opportunities in private markets. The digital platform, Climarket, connects banks, family offices, venture capital firms, private equity funds, fund managers and high net worth individuals with debt and project finance investment opportunities in energy transition, sustainable agriculture, net-zero real estate, water solutions and the circular economy. Climate Solutions intends to expand the platform to include private market equity investment opportunities in the near future. Climate Solutions’ proprietary investment screening tool pre-screens all investment opportunities and the platform also identifies how they contribute to UN Sustainable Development Goals. Climate Solutions CEO Simon Puleston Jones said the platform, which launches with over US$175 million of secured green bond investment opportunities, brings “much-needed transparency to private markets”. Launched less than two months ago, Climate Solutions has already signed over US$2.5 billion of equity and debt capital raising mandates with respect to energy transition and vertical farming. Climarket is built on technology provided by Delio, a UK-based fintech with a global client base including UBS, Barclays and ING.

Proprietary climate risk scores are now available on Moody’s Analytics’ commercial real estate (CRE) analytics platform, REIS. The scores quantify the exposure of commercial properties and geographies to the physical impacts of climate change, providing investors, brokers, and lenders a more holistic view of risk exposure. “This integration marks an important step in the evolution of our property analytics platform into a full-service risk assessment proposition for the CRE industry,” said Luis Amador, General Manager of Moody’s Analytics CRE Solutions. “The ability to view property-level climate risk data alongside traditional performance metrics offers a competitive advantage at every stage of the CRE lifecycle, from loan or investment screening to ongoing evaluation and reporting. It enables CRE industry participants to build resiliency into their portfolios and engage in more forward-looking decision-making.” Moody’s said the increasing frequency of severe weather is prompting greater concern for the effects of climate risks on commercial real estate, increasing demand for high-quality data and analytics regarding the location of risk, and the impact this risk will have on performance metrics.

LexisNexis PatentSight, an intellectual property analytics solution, has mapped the global patent system to the UN Sustainable Development Goals (SDGs) to make sustainability-focused innovation identifiable, searchable and trackable. The development will give users “an unparalleled view” into the global innovation landscape while revealing opportunities in sustainable technology, said business information and analytics provider LexisNexis Legal & Professional. PatentSight harnesses global patent data to provide a new source to objectively measure and track innovation’s contribution to global sustainability, it added. By mapping advancements in science and technology as expressed through patentable innovation against the SDGs, the PatentSight analytics platform provides “unprecedented insight” into sustainable innovation on a global basis, allowing users to analyse innovation strength across distinct fields of sustainability. “Sustainable technology development is highly dynamic and competitive; by unlocking patent data as a rich new reference source, LexisNexis is providing the innovation community unparalleled insights into sustainable innovation on a global basis,” said Andrew Matuch, President of LexisNexis Intellectual Property Solutions.

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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