Environmental, Social and Governance (ESG) investing has passed the tipping point and become a key interest among investors across the board. ESG initiatives, particularly climate change, were highlighted at Davos in January this year; the EU has finalised ESG regulations that will come into play in 2021 and provide clarity in a market fragmented by voluntary measures; and the stats are tremendous. State Street Global Advisors, by way of example, expects better data and lower-cost solutions to drive global ESG exchange-traded fund and index mutual fund assets to over a trillion dollars by 2030.
Better data and lower-cost solutions are fundamental for data vendors looking for a slice of the ESG action. Many are already in the game, with Moody’s the latest to bring together its data and expertise across ESG, climate risk, and sustainable finance, to form an ESG Solutions Group. The group will be led by Andrea Blackman, previously managing director, content solutions, product and marketing strategy at Moody’s Analytics, in a new role based in London and reporting to chief operating officer Rob Fauber,
By pulling together Moody’s ESG data and expertise, the solutions group hopes to develop additional tools and analytics that identify, quantify, and report on the impact of ESG-related risks and opportunities.
With the solutions group in place, Moody’s claims:
- 5,000+ company ESG assessments
- Controversy screening for 7,900 companies
- 1 million climate risk scores
- 250+ sustainable bond and loan reviews
- 70+ ESG specialty indices
- Credit ratings that integrate ESG risk considerations
- Risk management solutions integrating ESG and climate risk factors
Fauber says the group ‘brings together capabilities from across the company to help market participants advance strategic resilience, responsible capitalism, and the greening of the economy by identifying risks and opportunities and providing meaningful performance measurements and insights’.
Moody’s upped its commitment to ESG last year with the acquisitions of Vigeo Eiris (VE), a provider of ESG assessments, data and tools, and sustainable finance; and Four Twenty Seven, a provider of climate risk analysis. These business units will continue to offer stand-alone ESG and climate risk solutions. Most recently, VE enhanced its Second Party Opinions for sustainability bonds by integrating aspects of the new EU regulation, particularly ESG taxonomy and the Green Bond standard. Four Twenty Seven has added wildfire risk to its on-demand real asset scoring application for a property or facility’s projected exposure to climate change effects.