Displaying items by tag: sustainability
JPMorgan Chase has partnered with software firm Datamaran to create a data-analysis tool for clients to gauge the ESG risks facing portfolio companies and the ESG risks that these assets pose to the world around them. This is a concept known as double materiality. While the concept is already built into EU ESG regulations, this would be the first time it is used in the U.S. The new tool is called ESG Discovery. Jean Xavier Hecker, who is the Paris-based co-head of EMEA ESG research at JPMorgan and the designer of the tool, stated, “Double materiality is the only way to think about ESG in a way that is both forward-looking and comprehensive.” The tool, which is now available to JPMorgan clients, will use artificial intelligence to compile data from corporate disclosures, regulations, and online media. It is important to note that it won’t provide an ESG rating or score. Its focus is on unpacking individual ESG drivers.
Finsum:JPMorgan has partnered with software firm Datamaran to create a tool that uses artificial intelligence to evaluate ESG risks.
Based on research published by Mattison Public Relations in London, more than half of the companies in the FTSE 100 now have board-level ESG committees. The data was compiled by reviewing the latest annual reports from all 100 companies. While the overall percentage was 54% of FTSE 100 companies, the research showed that the percentage varied by industry. For instance, 100% of oil, gas, and mining companies had board-level ESG committees, while only 13% of the non-bank financial services sector had these committees. Companies in the non-bank financial services sector include insurers, asset managers, and retail investment platforms. Within the 54%, 56% were made up entirely of non-executive directors. This would allow those companies to add directors with ESG expertise to provide greater oversight of the companies' ESG performance.
Finsum:Based on recent research, 54 companies in the FTSE 100 now have board-level ESG committees to evaluate a company’s ESG performance.
ESG is taking over Europe and PWC is forecasting that ESG could make up €775.7bn to €1.2tn by 2025. That figure would make ESG 27-42% of Europe’s entire private financial market, for context it is about 15% currently. Driving that projection is the EU’s new sustainable finance disclosure regulations. Almost a third of the firms surveyed cited regulation as a primary force pushing their ESG investment. Sustainable investing in Europe is also seeing large growth in a public investments like pension funds. Finally, PwC said they see a new wave of private funds coming in the future rather than a re-rigging of existing financial funds to be more ESG friendly.
FINSUM: Public investment is a critical piece of Europe’s ESG investment, which is why it was very important when the U.S. opened the doors for public sustainability investment recently.
Farming, often considered one of the original green industries, has fallen out of sync with…see the full story on our partner Magnifi’s site
In an eye-opening “expose” type article, for CIO of Blackrock’s ESG division went on the record saying that ESG was largely just hype and had little substance behind it. According to former CIO Tariq Fancy, “In truth, sustainable investing boils down to little more than marketing hype, PR spin and disingenuous promises from the investment community”. The comments ran in USA Today on March 16th.
FINSUM: The reality is a little more complicated. ESG does suffer from a great deal of greenwashing, and firms—at first—did little to genuinely integrate ESG into their decision-making. Over time, they have taken greater account of real ESG factors in investment selection, but at the same time much of what constitutes “ESG” and “green investment” is muddled and unclear. There is a reporting issue that the whole industry suffers from—there is not enough data to separate good from bad companies—and thus much of the investment selection gets generalized according to industries (e.g. tech is good, energy is bad), which is so broad as to be almost useless.