ESG metrics: Nasdaq ESG Footprint and S&P Global ESG Scores
19 May 2020
When SSE started its campaign for ESG disclosure in September 2015 only 14 stock exchanges had guidance on reporting environmental, social and governance (ESG) information for their market. Now our ESG Disclosure Guidance Database has 54 exchanges with written ESG Guidance. Along with this increase in guidance and increase in ESG disclosure, there is also an increase in the number and sophistication of data services linked to ESG reporting. Two new services launched this month come from Nasdaq stock exchange and Standard and Poor’s.
Nasdaq Launches “ESG Footprint” tool
With the launch of its latest ESG data service, Nasdaq ESG Footprint, Nasdaq now empowers institutional and retail investors to better understand the sustainable impact of their global portfolios. Nasdaq’s new ESG data service, Nasdaq ESG Footprint, analyzes the sustainable competitive advantages and disadvantages of more than 13,000 globally listed companies from 60 different global data sources to support institutional and retail investors in understanding the ESG impacts of their portfolios. The tool can be applied to portfolios and individual securities and should help inform investor decision-making in portfolio construction and risk management, including: 1. Building global portfolios tilted toward higher-scoring ESG companies without compromising return 2. Comparing an objective ESG ranking for a company in a given portfolio against its peers 3. Reporting sustainable investing metrics and actionable analysis to clients
Announced May 14, 2020, Nordea Bank is the first major client to license Nasdaq ESG Footprint. Nordea has white-labeled the platform under the name “Nordea Sustainability Footprint” to make independent ESG rankings data available to its savings advisory clients.
“We believe the Nordea Sustainability Footprint will help our customers to better understand what sustainability means in relation to investments, so that the importance of making sustainable choices becomes more evident.” - Anders Langworth, Head of Sustainable Finance, Nordea.
ESG Footprint bolsters Nasdaq’s suite of sustainability-related solutions, which also includes the recently acquired OneReport, an ESG reporting platform that helps companies organize and deliver their ESG data in line with corporate responsibility frameworks and the demands of ESG rating agencies.
S&P launches new “ESG Scores” tool
S&P Global has launched its proprietary S&P Global ESG Scores, which cover more than 7,300 companies, representing 95% of global market capitalization. The new ESG Scores are based on the SAM Corporate Sustainability Assessment – an annual evaluation of companies' sustainability practices that have been conducted since 1999. The evaluation focuses on industry-specific and financially material criteria and is also used to power the Dow Jones Sustainability Index (DJSI). The scores also serve as analytical tools for S&P Dow Jones Indices' core ESG index offerings including the S&P 500 ESG Index. The launch of S&P Global ESG Scores and Nasdaq’s ESG Footprint comes amid growing market demand to integrate ESG factors into corporate investment and business strategies. S&P acquired SAM in January 2020, which along with the recent Nasdaq acquisition of OneReport shows how big financial data and service providers are seeking to respond to this growing demand by buying specialist ESG service providers in order to boost their offerings in this space.
About the SSE
The SSE initiative is a UN Partnership Programme organised by UNCTAD, the UN Global Compact, UNEP FI and the PRI. The SSE’s mission is to provide a global platform for exploring how exchanges, in collaboration with investors, companies (issuers), regulators, policymakers and relevant international organizations, can enhance performance on ESG (environmental, social and corporate governance) issues and encourage sustainable investment, including the financing of the UN Sustainable Development Goals. The SSE seeks to achieve this mission through an integrated programme of conducting evidence-based policy analysis, facilitating a network and forum for multi-stakeholder consensus-building, and providing technical assistance and advisory services.
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