London Stock Exchange Group (LSEG) has launched a new sustainable finance innovation unit in Singapore that will marry ESG expertise, data science, and “design thinking” — with a mandate of “solving challenges for market participants across financial markets, such as accelerating investment into green infrastructure projects, measuring climate risks and making ESG disclosure quicker and easier.”
The multidisciplinary team will work closely with key players in Singapore and global financial institutions, corporates, universities and industry associations, LSEG said. Part of its LSEG Labs (previously RefinitivLabs) network, the unit is being supported by the Monetary Authority of Singapore (MAS) — the city state’s Central Bank.
“We are excited to gain the backing of MAS to support the business, finance and investor community in accelerating the transition to a net-zero, sustainable economy. This is a powerful initiative given both of our positions at the heart of international capital markets and our combined focus on innovation and global collaboration in sustainable investment and finance,” said David Harris, global head of sustainable finance, data and analytics at LSEG, in a canned statement.
Regulators and institutional investors around the world continue to pile pressure on fund managers and indeed corporates to improve their sustainability practices — and ability to report on them clearly and consistently using modern tools. For many, ESG disclosure remains challenging and is often done using Excel spreadsheets.
ESG disclosure is improving in the fund world, but getting high quality, machine-readable corporate-level data for analysts remains highly challenging.
As OS-Climate’s Michael Tiemann earlier told ESG Insight: “One of the things that is a great challenge is getting the corporate data. There are a number of standards and the corporations are kind of doing their best, more or less in working their way toward reporting that [ESG metrics]. But these reporting standards don’t necessarily mandate the kind of data organisation that makes it super easy to then plug it into an analytical tool.“So if somebody if somebody discloses in their sustainability report, chapter and verse of all these different policy requirements and regulatory requirements, and they publish an essay in PDF… it might meet the ESG requirements, but it makes life very difficult for the person who tries to figure out, ‘OK, so how do I turn that into a number relative to this particular metric that we’re trying to compare across every different company?’
He added: “Corporations on the on the one hand have tried to be responsive to these reporting requirements, but they also want to know when everyone’s going to settle on a standard that is as simple as ‘we did this much revenue, we did this much cost; here’s our net GAAP profits. Because not only are some of these reporting metrics not standardised, but they are not even that simple. So getting corporations to keep the faith, improve the quality and standardisation of their reporting – and in an open source-friendly way – is the biggest challenge.”
