A tech company builds its own tool to get a holistic view of ESG ratings but bemoans social data quality.
Many companies in the NeuGroup Network are devoting significant resources to better address environmental, social and governmental (ESG) issues that are increasingly critical to how investors and other stakeholders view corporates.
- But not many treasury teams have access to an ESG dashboard, something one member who works at a large technology company described to peers at a recent meeting of treasury investment managers.
- The company built the dashboard itself, thanks in part to “people good on Python,” the member said. “We are lucky.”
- The dashboard offers a “holistic” view of the ESG ratings of all the company’s investments—those managed internally as well as assets managed in separate accounts.
- The member said one goal is to make sense of managers who “all have different ways of measuring ESG.” The company wants investments that are consistent with its goals of reducing carbon emissions and promoting more representation of women and minorities, among others aims.
- The dashboard uses ESG ratings data from MSCI and the company plans to add other sources as it implements targets for its ESG investments.
Data deficit. The problem, the member said, “is that there is not that much data out there,” especially regarding social metrics. The only information some companies provide about women is how many of them are on the board of directors, she added.
- An ESG asset manager for Morgan Stanley, sponsor of the meeting, agreed that compared to data on environmental records, there is “a massive gap on the social side.” He mentioned difficulty getting information on how companies ensure the safety of employees.
- The manager said investors—whether or not they have a dashboard—need to take ESG scores with “a pinch of salt.” His team tries to re-rate companies and look at them through “our own lens” to make the ratings “more relevant.”