Edison Group, an international research and investor relations consultancy, has launched a new ESG solution, ‘Edison ESG Edge’ reports, which review companies’ ESG current performance and trajectory across the most significant and stringent criteria. The reports have a standardised structure and a ratified, forward-looking data set of drivers and future performance indicators, which will make assessing ESG performance easier and help democratises investors’ access to ESG insight, allowing them to make more informed investment decisions.
ESG investing is now firmly in the mainstream. A recent report by one leading US investment bank found that flows into ESG funds were up 102 per cent over 2020, with November commitments reaching $47 billion compared with an average of USD13 billion in 2019, with this upward trend predicted to continue well into 2021.
Yet various surveys and reports continue to highlight investors’ significant fears over the quality and fragmentation of ESG data and put the issue at the top of their concerns. Assessment has yet to be standardised, dozens of competing metrics are vying for validation and, as investor education continues to progress, many of the data points conceal as much underlying truth as they reveal.
The majority of the relevant ESG information is only reaching a limited proportion of large institutional investors, which have the substantial resources and teams of analysts needed to analyse such complex data on all the stocks they want to consider. This leaves many investor groups, such as family offices, and also retail investors, being bypassed.
Edison´s new series of reports, Edison ESG Edge will help solve the corporate and investor challenges as well was making ESG insight more widely available across markets. They will enable all investor groups to have an all-encompassing report of companies’ financial and ESG drivers.
In collaboration with data provider Rebalance, Edison´s new reporting product (fully compliant with the Sustainable Accounting Standards Board (SASB)) begins by analysing data. Companies are evaluated across 10 different layers including: strategy, peer benchmarking, ESG SWOT, rebalance scores, environmental performance insight, social responsibility scorecard, socio-political performance, governance scorecard, stakeholder analysis and ESG Risk and VaR.
The new ESG reporting product then follows up with in-depth management and employee interviews to test initial hypotheses and mine the narrative behind the data. The findings are then condensed into a final report with a strong focus on key ESG drivers, transition opportunities and risks. Edison’s distribution platform then makes every report available to its global audience of specialist and boutique institutions as well as family offices, wealth managers, retail investors and large institutions.
Neil Shah, Managing Director, Content and Client Strategy at Edison Group says: “While ESG investing is certainly now mainstream most investors do not have access to the level of information they need or the resources to analyse fully ESG data, which is critical for them to make the most informed investment decisions.
“With our Edison ESG Edge reports we address this issue and provide the standardisation of data and the analysis to allow them to accurately assess companies against ESG criteria. Democratising access to ESG data benefits both the companies seeking to prove their ESG credentials as well as the investors looking to commit capital to them, making for more transparent capital markets, which will ensure that, from an ESG perspective, funds flow to the most deserving companies.”