RegTech Insight Brief
Arabesque Data Available of GoldenSource ESG Impact Platform
Enterprise data management company GoldenSource is to enable investors to access Arabesque’s S-Ray ESG data offering through its own cloud-based ESG Impact platform. The deal, which includes the use of Frankfurt-based Arabesque’s SFDR Data Solution, comes weeks before asset managers and other financial institutions must begin reporting on their ESG performance under the European regulations. Arabesque’s S-Ray suite provides emissions and other information on global stocks, drawing on four million data points each day, the company said.
Broadridge Launches Web-based ESG Performance Dashboard
FinTech Broadridge Financial Solutions has unveiled its ESG Performance Dashboard, which offers companies a view of their sustainability and governance performance. The rankings and ratings are based on more than 300 million data points drawn from 800-plus sources, the New York-company said. The web-located dashboard will show firms where they can make improvements to their ESG records, it added. An extension also enables clients to compare their scores over the past five years.
IBA Upgrades Aviation Carbon Tracking, Analysis Product
Aviation data and advisory firm IBA has upgraded its Carbon Emissions Calculator to help airlines report and analyse their fleets’ carbon footprints. The service is accessible through the UK-based company’s expanded InsightIQ product. IBA said the improvements had been made after it consulted more than 100 companies following the product’s launch in March. For investors, the new-look InsightIQ will also offer information on companies’ investments for ESG compliance.
EFRAG Names 71 Experts to Create Standards Proposals
The body charged with drafting sustainability reporting standards for the European Union’s regulators has put in place a team of 71 experts to begin the process. The European Financial Reporting Advisory Group (EFRAG) appointed experts from finance, academia, industry, NGOs and the small business sector. They will sit on 11 Expert Working Groups that have been tasked with hammering out a set of standards that can provide the underpinnings of the union’s Corporate Sustainability Reporting Directive. EFRAG put out a call for potential members in August and said it had chosen the 71 from “very large number of high quality applications”.
SEC Reiterates it Has Powers to Prosecute Greenwashing
US financial watchdog the Securities and Exchange Commission (SEC) has warned that it will come after companies who make false ESG claims or commit vital data in their disclosures. Division of Enforcement Director Gurbir Grewal reminded a conference in Washington DC that rules that applied to the selling of financial products were also relevant to claims about sustainability. He cited recent examples in which the SEC brought cases against Fiat Chrysler and Pax World Management for greenwashing. “We will continue to apply long-standing, well-known and understood regulations and standards that govern the securities industry when investigating possible misconduct,” he said.
More Net-Zero Guidelines from UK Regulator, Institutions
The UK’s Financial Conduct Authority (FCA) has become the latest British financial overseer to issue proposed ESG guidelines. The regulator’s ESG Strategy details how it will monitor financial institutions’ management of climate-related risks. That coincided with the publication of a report by UK-based financial firms on how they can help bring about a decarbonised world. The Financing a Just Transition coalition of banks and investors issued its “Just Zero” report, which illustrates how City firms can help their workers, communities and suppliers cut their carbon footprints. Last week the London Stock Exchange unveiled its own guidance on what would constitute green and sustainability bonds, the first central bank to do so.
CGS Adds Sustainability Categorisation to Bonds
CUSIP Global Services (CGS) has incorporated ESG indicators for US corporate and municipal bonds within its data feeds. The unit of S&P Global now provides classifications of issuances according to their sustainability attributes. The new feed uses International Capital Market Association (ICMA) and Climate Bonds Initiative methodologies to identify the securities as green, social or sustainable bonds. Roger Fahy, Vice President and Chief Operating Officer at CGS, said the new data field was created because the company had been approached by investor clients keen to know how to differentiate between green issuance and “vanilla” debt. “We see there is a need to be able to logically categorise new offerings separate from the general population of debt,” Fahy told A-Team ESG Insight.
LSEG and JPXG to Launch TOPIX-based Climate Indices
New climate indices are to be launched based on the TOPIX 500, offering investors a net-zero benchmark for companies listed on Japan’s stock market. Compiled by London Stock Exchange Group (LSEG) and Japan Exchange Group (JPX), the FTSE/JPX Net Zero Index Series will be based on the European Union’s Climate Transition Benchmark and will be aligned to meeting net-zero targets by 2050. They will also integrate Transition Pathway Initiative (TPI) Management Quality scores, which indicates how far a company has built climate-change policies into its operations. The indices, which will go live early next year, can be used for passive or active investment strategies and will also be available for research use, the LSEG said.
Goldman Sachs Adds Carbon Footprint Measures to Marquee
US investment bank Goldman Sachs has built carbon footprint analyses of companies covered on its Marquee digital marketplace, enabling institutional investors to track the emissions of stocks and corporate bonds within their portfolios. The calculations are based on Scope 1 and Scope 2 emissions data as well as carbon intensity levels and net-zero commitments. Users will also be able to compare their portfolios against benchmarks that will enable them to analyse carbon contributors by sector, industry and region. Analytics within the offering comply with global standards including the European Union’s Sustainable Finance Disclosure Regulation and the those of the Task Force on Climate-Related Disclosures.
UK’s FCA Seeking Views on ESG Product Labelling
The UK’s financial watchdog is seeking views from market participants on how investment products should be labelled with regard to their sustainability and corporate social responsibility profiles. The Financial Conduct Authority said it was also gathering opinions on supporting entity-level and product-level disclosures. The announcement was made on Finance Day at the COP26 UN climate summit in Glasgow. The findings will shape policy proposals that will go out for consultation in the spring, the FCA said. In its latest Financial Lives survey, the regulator found that 80 per cent of respondents said they wanted their money to “do some good”.