“An ESG Starting Guide for Young Practitioners” by Konstantina Yaneva, RS Metrics

An ESG Starting Guide for Young Practitioners

by Konstantina Yaneva, RS Metrics Data Science intern

In recent years, consensus has broadened over the pertinence of environmental and social causes in managing risk and profitability in the financial sector. A large and ever-growing number of actors (banks, investors, regulatory bodies, business, NGOs, and governments) have expressed their commitment to evaluating investments and corporate performance through the lens of ESG. And though the ongoing pandemic has only accelerated the demand for solutions that strengthen economic and company resilience, integrating sustainability factors in finance remains a difficulty given the complexity of modeling and managing ESG.

Proposed here is a small repository of resources for young practitioners entering the field of sustainability and finance. This is by no means a comprehensive guide to responsible finance, but rather a modest overview offering some structure to understanding the ongoing change in the financial field, the major trends, concerned players and issues.

What is Responsible Finance and ESG?

· Expanding on the types of responsible investment and what is to be understood by ESG.

Why is Responsible Finance Important?

· Five Ways ESG Creates Value: Analyzing the ESG links to cash flow in (1) facilitating top-line growth, (2) reducing costs, (3) minimizing regulatory and legal inventions, (4) increasing employee productivity, and (5) optimizing investment and capital expenditure.

· ESG Matters: Exploring the relationship between ESG and financial performance.

· How Sustainable Finance Can Help The Real Economy Go Green: On the role of financial products and services in reducing exposure to environmental impact.

How are ESG measured, disclosed and reported?

· Provision of Non-Financial Data: Mapping of Stakeholders, Products and Services.

· ESG Reports and Ratings: What They Are, Why They Matter: Reviewing the biggest third-party providers and their methodologies for rating companies.

· The Future of Earth Observations: Reviewing the current geospatial data sector set-up.

ESG Taxonomy

· The EU Taxonomy of Sustainable Economic Activities: Exploring the EU taxonomy system.

· UK Green Taxonomy and Learning From The EU Approach.

ESG Regulations

· On European and UK regulations.

· On Setting a Global Standard for Nonfinancial Information: Thinking about the role of TCFD, GRI, IIRC and others.

· On Setting a Global Sustainable Accounting Framework.

What are some issues associated with ESG?

· Climate-related Financial Disclosures: Status Report: On the inconsistent nature and the slow adoption rate of self-reporting.

· ESG Investing: Practices, Progress and Challenges: Discussing issues of ESG metrics including accessibility, comprehension, incompleteness, and non-comparability.

What are some ESG Proposed Solutions?

· IIF 2020 Increased Demand for Granular Data: Regarding the harmonization cross-sectorial framework for ESG disclosures across jurisdictions.

· Asset-Level Data and the Energy Transition: Analyzing the need for detailed and complete data on corporate assets for assessing company risk and diffusion of that risk through the financial system.

· Geospatial Data: On the growing need of geospatial data solutions.

Other Useful Materials:

· Green Finance Education Charter (Green Finance Institute)

· Six Trends Transforming Finance for a Sustainable Economy

· The Age of ESG

· The Sustainable Market Structure

· Making Money Moral. How A New Wave of Visionaries is Linking Purpose and Profit. By Judith Rodin and Saadia Madsbjerg

· Aligning Finance for the Net-Zero Economy

· How Financial Centres Across All Continents Are Mobilizing Their Capital, Resources, Connectivity, And Expertise To Align With The Objectives Of A Sustainable Financial System

· Sustainable Investment in the European Asset Management Industry: Defining and Sizing ESG Strategies

· The Role of Green Finance and its Challenges for Europe

· The Business Case for ESG

· Climate Risk Management vs Alignment with Climate Outcomes

· Action Must Replace Talk on Climate Change: On emissions rhetoric

· ESG Impact Is Hard To Measure But Not Impossible: Going beyond ESGs

· Sustainable Finance and the General Public

Konstantina Yaneva is a RS Metrics data science intern, with a strong interest in sustainability policy. Konstantina is a graduate of Columbia University and is current working towards a data science master’s degree.

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