Sustainability data and technology provider ESG Book and nonprofit foundation the Future Investment Initiative (FII) Institute have announced the launch of the Inclusive ESG Tool and Inclusive ESG Score, a new suite of solutions aimed at improving the quality of ESG data and facilitating of sustainable investment capital flows for emerging market (EM) companies.
According to the organizations, the new solutions are intended to address a multi-trillion dollar ESG investment gap, with emerging markets receiving less than 10% of ESG capital flows despite accounting for well over half of global GDP to take. The FII Institute said investors have indicated that ESG rating agencies are a significant barrier to investment flows in emerging markets, with the use of KPIs that are not relevant to emerging markets being one of the key challenges.
CEO of the FII Institute, Richard Attias, said:
“Our global financial markets are more interconnected and driven by change than ever before. Investing in ESG (Environmental, Social and Governance) initiatives plays a crucial role in the solution. These funds should be strategically targeted at the emerging markets where their impact is most needed, while ensuring the returns necessary for the vitality of these markets.”
The key analysis of the new toolkit is the Inclusive Momentum Score, which aims to indicate future ESG performance, integrating current and ongoing changes in companies’ sustainability performance. The momentum score is combined with a current ESG performance score and Disclosure Score to provide a comprehensive assessment of companies’ sustainability performance.
The organizations also announced the launch of a Top 250 Inclusive ESG ranking based on the new score, aimed at identifying the most sustainable companies from emerging markets.
ESG Book CEO Dr. Daniel Klier said:
“We are excited to partner with the FII Institute to usher in a new approach to ESG data in emerging markets. The Inclusive ESG Score is a next-generation investor tool that identifies the sustainability leaders of today and tomorrow, with a transparent, data-driven approach tailored to emerging markets. Through this partnership, we look forward to delivering a solution that improves investment decision-making, and in turn helps drive greater ESG investment flows to companies in emerging markets.”