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Toolkits For Assessing ESG Performance

What's happening? Sustainability ratings company EcoVadis has raised $200m from CVC Growth Partners for the expansion of its performance improvement tools for global supply chains. It said the deal was one of the largest environmental, social and governance (ESG) investments so far and showed how important ESG is to the success of a business. The company has a customer base of 450 and its network of assessed companies is more than 60,000 in 155 countries.

Why does this matter? While asset managers and rating agencies jostle to devise metrics for assessing companies' ESG credentials, it seems probable regulators will be the ultimate arbiters, as a recent Financial Times article by Huw van Steenis, former adviser to Mark Carney, hints. So, the value of a service like EcoVadis perhaps lies less in the ratings service it provides and more in the other tools it offers to businesses wanting to reduce risk in their procurement processes. The company carries out due diligence, rather than relying on company disclosures. To get the bigger picture, a dynamic monitoring system can take into account the direction of travel of a given company or industry, and provide additional value on top of static assessments. Equally, to truly assess the emergence of risks and opportunities impacting a company, there is a need to monitor those risks and opportunities as they develop. That is the core of what we do at Curation.

Further thought from Curation – The scope for ESG to dominate the agenda at Davos suggests the direction of travel for both policy response and further ESG-servicing investments may hasten, not least as private equity funds have earmarked a significant war chest for ESG and impact investing projects.

Nick Finegold is Founder & CEO of Curation Corp, an emerging and peripheral risks monitoring service.

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