BlackRock and RepRisk have unveiled ESG data for thousands of private companies just weeks after Truvalue Labs said it would roll out its SDG coverage to “hundreds of thousands” of unlisted firms by the end of the year.
BlackRock partnered with Swiss data house RepRisk to develop the dataset, which it has now made available for clients on its eFront platform. “Enabling our clients to proactively identify ESG risks and exposures for private companies in their portfolios is key to better risk-adjusted returns,” said Melissa Ferraz, Managing Director at BlackRock and Global Head of eFront Insight.
ESG data has traditionally focused on publicly-listed companies, which are often required by stock exchanges and regulators to disclose information on ESG and sustainability issues, making it easier to gather data. However, new EU reporting requirements (known as the Sustainable Finance Disclosure Regulation and the EU Taxonomy) will require investors to disclose more on the ESG performance of their broader portfolios, including private markets. This has spurred on demand for data from such companies as investors say they will struggle to comply with the rules without it.
The EU’s Non-Financial Reporting Directive – rules for companies on disclosing sustainability data – currently covers just 7,000 listed firms. The European Commission, which is in the midst of overhauling that Directive and will release a proposal for updated rules in coming months, is under increasing pressure to widen it to include private companies, in order to turbocharge the level of information being provided to investors.
During Responsible Company’s inaugural webinar last month, Eli Reisman, Associate Director of Product Management at ESG and AI specialist Truvalue Labs, discussed its data for companies’ alignment with the Sustainable Development Goals. He said the data was collected for private entities by analysing third-party data and information, and that it planned to up its coverage from 3,000 unlisted firms “into the hundreds of thousands hopefully by the end of the year”.