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Special Report

ESG: The metrics jigsaw

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ESG roundup: Asset managers flag reporting services, climate analysis

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BNY Mellon has launched an environmental, social and corporate governance (ESG) information reporting service for clients.

It said the service would allow clients to track their portfolio investments based on ESG issues and United Nations Global Compact (UNGC) principles. The UNGC principles are principles for responsible business conduct.

According to BNY Mellon, clients would be able to see “total ESG and UNGC scores on equities at the account level versus relevant benchmarks over time” and at the company-level.

The data used for the reports was sourced through an agreement with Arabesque’s S-Ray quantitative tool, which uses machine learning to score companies on sustainability metrics.

According to BNY Mellon, clauses within the new EU pension fund directive, IORP II, were causing increased demand for ESG scoring from institutional investors.

Fraser Priestley, managing director of global risk solutions in EMEA at BNY Mellon, said: “We believe our new service around ESG metrics will be particularly helpful to a number of European pensions who… are required to disclose the relevance and materiality of ESG factors and how they are taken into account for risk management processes.” 

Neuberger Berman implements climate risk analysis

Neuberger Berman says it has complied with the main recommendations of the Task Force on Climate-related Financial Disclosure (TCFD) and launched a “new resource to analyse potential climate-related risk”.

Using different global warming scenarios, the asset manager’s portfolio managers analysed and reviewed which securities were likely to benefit or suffer from changes in weather patterns, regulation or technology.

The firm then quantified the potential value-at-risk from climate change to all the listed equity and corporate bond holdings in its US mutual funds and international UCITS range, and said it would expand the analysis to holdings in other client portfolios in the future.

In line with recommendations from the TCFD, the asset manager’s board had been charged with oversight of climate risk as part of its broader oversight of enterprise risk.

TCFD-based reporting will be mandatory for signatories to the Principles for Responsible Investment from next year.

Storebrand brings strategies to UK

Storebrand Asset Management today announced the UK launch of three sustainable investment strategies.

The Storebrand Global Multifactor strategy combines sustainability with value, size, momentum and low volatility as four equally-weighted risk factors.

Storebrand Global ESG Plus is a fossil-free global equity strategy that tracks the MSCI World Index, while Storebrand Global Solutions is an actively managed global equity portfolio that aims to generate alpha by identifying businesses from developed and emerging markets that provide solutions to help achieve the UN’s Sustainable Development Goals.

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