ESG innovation of the year, research: Wellington Management

Working to enhance the ability to assess material financial risks of climate change, Wellington Management has developed a number of data-driven tools and dashboards, which are available to help its internal investors integrate climate and ESG insights into their decision-making processes.

One of these is the Climate Exposure Risk Application, a geospatial tool that maps climate-variable projections to physical locations associated with investment holdings.

It has also created dashboards that allow investment teams to view climate and ESG ratings in order to facilitate comparisons of carbon intensities.

Its Climate Research Team also conducts comprehensive physical risk assessments of individual issuers, prioritised according to the needs of investment teams. These Climate Portfolio Reviews help investors assess the materiality of a company’s physical climate risk and current management practices to adapt to climate exposures.

Wendy CromwellThese tools have seen Wellington Management awarded the ESG innovation of the year award.

Chris Goolgasian, director of climate research at Wellington, said: “Our intent is to bridge the gap between climate science and finance to develop actionable, financially-relevant insights that highlight potential asset mispricing and may enable us to deliver better investment outcomes for our clients.”

Wellington’s Climate Research Team also incorporates physical risk research from Woodwell Climate Research Center and transition risk research from Massachusetts Institute of Technology Joint Program on the Science and Policy of Global Change. Woodwell and Wellington also released an updated disclosure framework which outlined how companies can share location data to enhance transparency.

Wendy Cromwell, vice chair and head of sustainable investment at Wellington, explained it will continue to expand this work, saying: “We see our multi-faceted climate-related efforts as critical to our core mission to drive excellence for our clients to positively impact millions of beneficiaries’ lives.”