Sustainable Investment Awards 2022

ESG data provider of the year, Europe: Moody's

Moody's secured the European ESG data provider of the year award after being praised for its data for small- and medium-sized enterprises (SMEs).

One judge was particularly impressed by the fact that Moody's has tackled the "little explored" area of SME environmental, social and governance (ESG) scores, using its ESG Score Predictor tool.

Julia HaakeMoody's ESG Solutions managing director for market strategy Julia Haake told Environmental Finance it launched this risk management tool amid the growing demand from European investors to conduct "robust" ESG due diligence across their investee and supplier base, and a lack of available solutions on the market.

"The practicalities of carrying out this analysis on a global scale – combined with low ESG disclosure rates among SMEs – can be a barrier to effective decision making," Haake said.

Haake said the ESG Score Predictor Tool was a "first-of-its-kind" tool that is capable of "generating predicted ESG metrics on companies of all sizes, regardless of their private or public status".

"What this means in practice is that, using basic metrics on size, location, and industry, we can provide predicted scores for any target entity, with 300 million companies already scored," Haake said.

In addition to its modelled scores, Moody's now provides analyst-verified ESG Assessments on more than 10,000 large companies globally. The firm also provides controversy monitoring, daily performance alerts, and negative and positive screening tools across 17 thematic areas for these large companies.

Haake said another important differentiator in its ESG data offering was the "double materiality" approach at the heart of its assessment methodology.

"Many data providers continue to focus solely on the impact of ESG factors on companies' financial and operational performance," Haake said. "By contrast, our 'double materiality' approach allows us to go one step further and capture how a company's operations impact people and the environment, too."