ESG assessment tool of the year: Earth Capital

Richard BurrettEarth Capital's Earth Dividend tool continued to show its value to measure and enhance a company's sustainable development value.

The tool's 2020 results of Earth Capital's Nobel Sustainability Fund (NSF) showed that the fund continues to make a net positive contribution to sustainable development, with improvement in four of the five themes of the Earth Dividend.

Those themes are natural resources, ecosystem services, pollution, social and economic contribution, and society and governance. They feed into 30 wider indicators which can be mapped to the UN's Sustainable Development Goals (SDGs).Earth Dividend tool's themes linked to SDGs

Earth Dividend calculates a scorecard of a company's net environmental, social and governance (ESG) impacts, positive, neutral and negative, based on these indicators. As demonstrated by its NSF, the tool is used by Earth Capital to identify potential value creation and mitigate any potential ESG risks. It informs both the firm's investment approach and its investment themes, which includes energy, food and water.

"At Earth Capital, we believe sustainable development requires a comprehensive understanding of the total impact of a business, including value creation opportunities. With investors demanding granular data on the impact of their investments, it is vital that companies have the resources to evaluate and communicate their impact on our communities, environment and economies," said Richard Burrett, chief sustainability officer at Earth Capital.

"Mapping to the SDGs and linking in ESG will be key as we tackle global challenges," commented one Environmental Finance Sustainable Investment Awards judge.