Refinitiv Unveils Fund ESG Scores

    Stockholm (NordSIP) – On Tuesday, July 7th, Refinitiv launched an ESG scoring service covering investment funds. The new Refinitiv Lipper Fund ESG Scores’ goal is to provide an independent third-party assessment of self-identified ESG focused funds to disentangle the modalities of ESG integration from those that focus only on exclusion to those “deep ESG integration”, and other levels in between.

    The fund ESG scores combine data and methodologies from Refinitiv and Lipper. Refinitiv is one of the world’s largest providers of financial markets data and infrastructure, serving over 40,000 institutions in approximately 190 countries. The company is owned by Blackstone (55%), the world’s largest manager of alternative assets, and by Thomson Reuters (45%), the media conglomerate. Lipper, also owned by Thomson Reuters, provides research to asset managers and institutional investors on the fund industry. The Fund ESG scores are available on Refinitiv Workspace, Eikon or API Feed.

    The new ESG score combines data from Lipper 330,000 fund share classes, ESG coverage on over 9,000 companies representing over 80% of global market capitalization, and Refinitiv’s proprietary scoring methodology. The new fund scores cover over 19,000 unique portfolios representing US$15.7 trillion in total net assets across equity, bonds and mixed funds.

    The new service measures ESG performance, commitment and effectiveness across ten main themes based on publicly-reported data of constituent fund companies across the three ESG pillars. The service’s thematic coverage includes emissions, environmental product innovation, diversity and inclusion, human rights, shareholders, among others. The scores incorporate two overall ESG scores in the model. A pure ESG score measures the ESG performance of a company or a fund based on verifiable reported data in the public domain. Another score focusing on ESG controversies adds another layer to evaluate the company’s sustainability impact and conduct.

    “Even as the world addresses the challenges of COVID-19, climate change remains one of the largest global issues impacting communities, food supplies, bio-diversity and economies,” David Craig, CEO of Refinitiv, said. “It has become imperative for financial markets to address so investors can direct funds to transitionary projects and away from high carbon and carbon-equivalent industries, and to meet an increasing number of regulatory mandates. Sustainable finance isn’t just a political or social choice — it’s a smart business decision. Refinitiv is proud to play its part in encouraging this transition by providing trusted data and analytics to investors, traders and advisors so they can evaluate ESG performance and allocate capital.”

    “In addition to servicing the ESG expert community we believe we can help mainstream sustainability into the financial markets by delivering meaningful data, analytics and tools to finance professionals, allowing them to incorporate ESG factors more easily into the investment process. The launch of Fund ESG scores is an important step in this process,” said Leon Saunders Calvert, Head of Sustainable Finance, Lipper & I&A Insights, Refinitiv.

    Earlier this year, Refinitiv announced enhancements to its ESG Scoring Methodology to reflect sustainable industry developments and market changes.  In 2019, Refinitiv brought together its ESG Sustainable Investing and Lipper Fund Ratings businesses to increase focus on unearthing links between sustainable business strategies and financial performance.

    Image by Siobhan Dolezal from Pixabay

    Filipe Albuquerque
    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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