The United States, unlike other powerful nations, is only beginning to create jigsaw-like pieces that will be required to structure and standardize sustainability reporting requirements, which will be required to meet the newly proposed Securities and Exchange Commission rules.
In a statement, Gary Gensler, the chairman of the SEC, said, When I think about this topic, im reminded of walking down the aisle of a grocery store and seeing a product like fat-free milk. But here are a few things you can note that fat-free is not necessarily true. In the same case, however, there is currently a huge range of information that asset managers might disclose or mean.
In March, the SEC reviewed proposed legislation that would require businesses, both domestic and foreign, to provide information on climate impact and emissions. Last month, the proposal was enhanced with modifications to enhance information for investors about funds and advisers'' incorporation of environmental, social, and governance (ESG).
These specific reporting restrictions have, historically, been largely optional in the United States, but pressure is mounting on companies and investors to understand, communicate, and act on sustainability data.
In person from July 19 to July 20 to 28, join us at the leading event on application AI for enterprise business and technology decision makers.
Some companies are waiting for an official policy to sort out the details. ESG Book, a business founded in 2018, developed a cloud-based platform backed by AI-powered analysis that provides its customer base of financial institutions like Bridgewater, J.P. Morgan, Citi, and Robinhood with sustainability and ESG data of over 25,000 public companies.
When business cant be as usual, change it
The ESG Book is breaking a newly announced $35 million series B round headed by Energy Impact Partners, along with Meridiam and Allianz X.
According to the company''s press release, the company hopes to expand its platform while ensuring that its technology continues to offer its financial institution customers ESG data that is, accessible, consistent and transparent, permuting financial markets to allocate capital to more sustainable and higher impact assets.
ESG Books hopes to bridge the gap between the ESG data companies who are collecting and placing in various places, such as press releases, online, annual reports, and other things, in order to distribute it in an accessible manner for investors to acquire their knowledge.
You see the Securities and Exchange Commission and the Federal Reserve incorporating climate risk into their practices, but at that moment, do you see significant changes in how investment patterns work? Klier asked. After all, we believe a lot of other companies are assisting individual businesses in their carbon calculation, but then the communications with stakeholders one being the financial services market at the moment, is not working. That''s the problem was trying to resolve.
Whats under the hood to bridge the gap
The ESG Books platform collects 450 data points on companies that they either report on themselves while using AI to analyze 30,000 news sources.
ESG Book performs analysis in two ways. A fund manager or investor may have data fed into their own systems via an API or they upload entire investment portfolios via a.csv file to the platform, and the ESG Book will perform all of the analytics on its platform.
Klier claims that by collecting information using a combination of human intelligence and artificial intelligence, every company will be invited to verify the data on the platform. So, businesses can see what we have about them and, I believe, [this is] a fairly straightforward way of developing a dataset but also giving them the right to collect it.
The company''s algorithm and database of public company information allows investors to sign on, type in the name of a public company such as Alphabet Inc., for example. From there it displays a UN Global Compact score, which includes a study of anti-corruption risk, environmental risk, human rights risk, labor risk.
Investors may also look into the raw data from ESG Book on a company to better understand the scope 1, 2 and 3 emissions of the company.
It can also show the distribution of a portfolio or company''s performance and allows investors and fund managers to compare the data to see how performance compares to industry or competitor averages.
ESG Book is a software program that can transform how ESG data is processed by the financial world. We believe it will significantly improve the quality and availability of ESG information to direct financing flows in accordance with sustainability goals and the Paris Agreement, according to Thierry Deau, the founder and CEO of Meridiam, one of the world''s leading investors. Sustainability can''t remain a buzzword in the C-suite.
Sustainability remains a buzzword for many CFOs, according to Klier. Despite being available on the ESG Books platform, investors will be able to acquire real-time, crystal-granular sustainability data, but it is equally of use to CFOs to help them understand how to communicate ESG data and make lasting improvements.
Because, in my view, we spent the last five years discussing a lot about it and making it a major topic, Klier said. Now, all stakeholders are expecting a lot. I believe it is a crucial time to increase investment and redirect flows.
Klier believes the series B injection will allow the company to prioritize its next focus: to collaborate with investors in order to increase transparency in private markets.
ESG Books'' growth is part of the larger ESG data and services market, which is expected to reach $5 billion by 2025.