Northern Trust enhances ESG analytics

Northern Trust has enhanced its ESG investment analytics to deliver new climate risk reporting for its institutional investor clients.

The Climate Focus Report offers a range of carbon metrics, physical risk and transition risk at portfolio level, including detailed emissions information.

The development supports investors such as pension funds, according to Northern Trust, and helps them to assess important climate risk factors against investments in their portfolio and compare them against a benchmark for “absolute and relative analysis over time”.

The tool also helps clients meet disclosure obligations through alignment with the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) reporting recommendations.

“As sustainability-focused monitoring requirements grow in number and become more complex, these solutions are intended to help institutions meet their obligations for assessing and reporting on both ESG and climate risk,” said Serge Boccassini, product lead, investment accounting and analytic solutions at Northern Trust.

“This is the latest example of how Northern Trust is deploying its technology and analytics expertise to help clients integrate ESG considerations into investment decision-making,” he added.

Northern Trust’s Climate Focus Report combines global custody asset information and data provided in partnership with ISS ESG, the responsible investment arm of Institutional Shareholder Services (ISS).

In October, a Federated Hermes poll of institutional and high-net-worth (HNW) investors and their advisors found 71% were concerned about the “quality of data and measurement” from their portfolio companies.

This was despite a significant proportion of investors integrating environmental, social and governance factors into their investment processes.

Others said they were making exclusion or inclusion decision based on ESG metrics or data.

Meanwhile last month a report by Capital Preferences revealed that despite demand for socially responsible investing, three in four investors were not confident their portfolios were aligned to their ESG values.