S&P Global and Moody’s ESG Solutions Group have joined a committee of data providers set up by Refinitiv, which aims to establish consensus on key ESG data issues and inform global policy developments.
The new Data Council says it will act as a “regulator sounding board”, identifying datasets that are material for the market in the short term and across longer time horizons. More broadly, it will “address critical questions in relation to the role, the indications, and the learnings we can glean from data to inform sustainable policy, investments, and business decisions”.
The group will operate under the auspices of the Future of Sustainable Data Alliance (FoSDA), a network of financial trade bodies, data specialists and public entities – backed by the UN – which was established by Refinitiv to develop global best practices around ESG data. Today’s announcement marks the group’s first anniversary.
According to a statement, members of the Data Council are already in conversation with other data providers and will be looking to add new members immediately.
“Establishing clarity on how to shape the maturing requirements for investment-grade data to support financial markets and regulatory policy is not a small task, but this forum brings together a wealth of experience and market understanding of the challenges and opportunities that data can enable in the effort to meet global sustainability goals,” said Leon Saunders Calvert, Head of Research & Portfolio Management at Refinitiv’s parent company, London Stock Exchange Group (LSEG).
The move comes as regulators eye more granular corporate disclosure rules to address numerous gaps in the sustainability data available to investors – most notably in the EU, where the first draft of disclosure requirements under a revised Non-financial Reporting Directive is due to be released shortly.
Since its formation, FoSDA has released a series of recommendations aimed at addressing industry-wide challenges, including the need to identify missing datasets, and partnering with regulators to identify key datasets to underpin taxonomy and policy development. It also collaborated with the Asia Securities Industry and Financial Markets Association on a study of the specific challenges facing the Asian Pacific market.
Founding members of FoSDA include the Climate Bonds Initiative, the World Economic Forum, the Institute of International Finance, the Official Monetary and Financial Institutions Forum, Tsinghua University, ASIFMA, FinTech4Good, the Institute of Public and Environmental Affairs, Spatial Finance Initiative, Bank of Africa-BCME and GoImpact.
Over the past few years, members of the Data Council have undertaken a series of high-profile acquisitions to emerge as ESG data heavyweights. S&P Global acquired carbon ratings provider Trucost in 2016, followed up with RobecoSAM’s ESG ratings business and analytics group IHS Markit. Rival Moody’s has added climate risk publisher Four Twenty Seven, ESG ratings provider Vigeo Eiris and China-based provider SynTao Green Finance to its stable.
Meanwhile, Refinitiv was acquired by LSEG in a $27bn deal which was completed last month. LSEG had already bought ESG fixed-income specialists Beyond Ratings, which had absorbed fellow french research and data house Grizzly Ratings back in 2018.