ESG Book aims to 'disrupt' sustainability sector with free data

Dec 8, 2021

This article is published in collaboration with Reuters

Steam rises from chimneys on a cold day in Moscow, Russia

The ESG book hopes to provide more transparency on sustainability. Image: REUTERS/Shamil Zhumatov/File Photo

Huw Jones

Europe Regulation Correspondent, Thomson Reuters

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ESG

Finance institutions are supporting the ESG Book which makes sustainability data available and comparable for all stakeholders.
Companies can use ESG Book at no cost to disclose, manage and keep ownership of their ESG data in real-time.

HSBC, Deutsche Bank and Swiss Re have thrown their support behind ESG Book, a new environment, social and governance (ESG) data platform launched on 1 December to 'disrupt' the market with a free "public good" service for companies and investors.

The ESG information sector has become a money spinner as asset managers increasingly rely on providers of such data to meet demand from sustainability focused investors. But it is also coming under closer scrutiny from regulators and governments as trillions of dollars flow into the asset class.

Founders of ESG Book said limited accessibility is hampering the acceleration of capital flows towards sustainable companies, particularly in emerging markets.

What is ESG? Image: UNPRI

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The founders also include the World Bank's International Finance Corporation, QUICK, Hong Kong Exchanges & Clearing, Glass Lewis, Bank Islam, Allianz X, Goldbeck and the Climate Bonds Initiative.

Companies can use ESG Book at no cost to disclose, manage and keep ownership of their ESG data in real-time. The data is then available to users for free, with a charge for analysis of the data, such as temperature scores.

The platform has been developed by asset manager Arabesque, and run according to principles from the UN Global Compact, which encourages companies to adopt sustainable policies.

"ESG Book makes sustainability data available and comparable for all stakeholders. It provides framework-neutral information promoting transparency," said Sanda Ojiambo, CEO of the UN Global Compact.

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Financing Sustainable Development

The world’s economies are already absorbing the costs of climate change and a “business as usual” approach that is obsolete. Both scientific evidence and the dislocation of people are highlighting the urgent need to create a sustainable, inclusive and climate-resilient future.

This will require no less than a transformation of our current economic model into one that generates long-term value by balancing natural, social, human and financial conditions. Cooperation between different stakeholders will be vital to developing the innovative strategies, partnerships and markets that will drive this transformation and allow us to raise the trillions of dollars in investments that are needed.

To tackle these challenges, Financing Sustainable Development is one of the four focus areas at the World Economic Forum's 2019 Sustainable Development Impact summit. A range of sessions will spotlight the innovative financial models, pioneering solutions and scalable best practices that can mobilize capital for the the world's sustainable development goals. It will focus on the conditions that both public and private institutions should create to enable large-scale financing of sustainable development. It will also explore the role that governments, corporations, investors, philanthropists and consumers could play to deliver new ways of financing sustainable development.

ESG 'Spotify'

Arabesque president Daniel Klier said the cloud-based ESG Book aims to be a disruptor in the same way streaming service Spotify has shaken up the music industry, to provide real-time ESG information in a common, consistent format.

"Through this platform, we aim to shape the future of ESG data," said Klier, a former head of sustainable finance at HSBC.

The ESG data sector is led by companies like MSCI, Bloomberg, S&P, London Stock Exchange Group, Moody's, Morningstar, ISS and Sustainalytics.

Largely unregulated, global watchdogs last month made their first recommendations to inject more transparency into how ESG data products and ratings are compiled to stop potential greenwashing or misleading claims about ESG credentials.

The International Sustainability Standards Board (ISSB) launched last month with G20 encouragement will introduce rules in the second half of 2022 to bring rigour and comparability to how companies disclose the impact of climate on their business.

"That's the biggest gamechanger as it means filing of data that is standardised and of a quality level that can go into annual reports," Klier said.

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