UK banks can now assess ESG within their supply chains
Environmental, social and governance efforts of British and EU partners will now be searchable through a new data repository.
Launched by CRIF, the new environmental, social and governance [ESG] analytics platform draws on 130 key indicators based on UK and European Union information sources, taking into account factors such as water usage, waste production, emissions, health and safety, modern slavery and inclusivity.
Financial institutions of all kinds are able to use the system, which delivers an overall ESG score and then breaks performance down into different categories. The idea is to help users identify the most sustainable and ethical firms in their supply chain and prioritise those relationships, identify new partners for future projects, support in-house ESG objectives, protect reputations from scandals and exposes involving suppliers, and better meet the reporting and compliance standards set by stakeholders.
‘There’s no doubt that protecting the environment for future generations is the number one most pressing challenge for individuals, businesses and governments today,’ said Sara Costantini, CRIF’s Regional Director for the UK & Ireland. ‘Financial institutions will play a crucial role in the transition to a green economy. For banks in particular, efforts to reduce their impact on the environment and promote good governance and social responsibility are going to be more and more important in the near future.
‘Considering the growing attention of the regulatory bodies towards ESG compliance in the EU but also in the UK, ESG Analytics enables banks, insurers and corporates to understand the impact of businesses they work with today and helps to inform their decision-making in this ever-more important area of work,’ she continued. ‘And by working with regulatory bodies all around the world, we ensure that we remain at the forefront of regulation so we can pass this knowledge onto UK financial institutions.’
Pressure is mounting on UK banks to clean up their investments and supply chains. in a recent study conducted by the University of Cambridge, it was found that between the leading 15 British banks and a further 10 asset managers, 805 million tonnes of carbon emissions are produced each year through third parties. If this were a country it would rank 9th globally for greenhouse gas output. Meanwhile, consumers are also increasingly demanding more responsible behaviour from the institutions handling their money, with CRIF’s own research suggesting 49% want their savings, cash, and pensions held somewhere that prioritises the environment, and 69% demanding transparency in how the company is run.
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Image: Javier Martinez