LSEG Partners ESG.AI to Drive Sustainability Reporting

Industries’ optimism for a more sustainable future has grown significantly over the past decade—perhaps even more so in the last two to three years. 

Environmental, social and governance (ESG) has become a staple acronym in the language they use in their reports and media to express their commitments to more conscious business practices. 

While this was previously a statement of intent, we’re seeing global actions from all major companies as they strive towards net-zero emissions across their supply chains and improved conditions for workers and the communities they touch. This led to a widespread realisation that their efforts somewhat hinge on real results. 

While you can simply watch a plant flourish in a changing environment, you can’t take this approach to the supply chain and it requires a much deeper understanding in order to convey the fruits of your labour, which is why data has become the most valuable factor in tracking and tracing a corporation's impacts. Moreover, this is now commonplace among financial institutions that have the power to facilitate greater impact through their funds, investments, and other influences on the economy. 

An announcement from the London Stock Exchange Group (LSEG) at the end of last year showcases these greater intentions to influence the way the world of finance supports businesses that deliver on their ESG targets and the broader legislation to generate a positive change. 

The organisation announced a partnership with ESG.AI Technologies, a Canada-based ESG decision support company, that resulted in agreed implementation of its artificial intelligence (AI) solution for analysing performance and paving the way forward. For LSEG to “continue to be at the forefront of developments in the industry”—as said by Cornelia Anderson, Sustainable Finance and Investment Group Leader at LSEG—incorporating such a solution is key and will nudge corporations to adopt the power of AI to streamline their ESG practices.

Nicholas Miller, the CEO of ESG.AI, tells us more about the platform and the impact that LSEG will provide as a result of the partnership. 

“The platform helps organisations and consultancies visualise ESG data to improve understanding and data quality as well as provide a new level of modelling, planning and impact analysis,” says Miller. “It enables customers to provide up to date and complete ESG data to ensure the most timely and accurate data and scores possible in a transparent and quantifiable way, and map data to key performance indicators from the major reporting standards providers.” 

As the organisation holds extensive data on various companies, employment of AI will streamline this and make sense of the LSEG’s past and present interactions to determine how best to deploy ESG.AI’s solution.

“We have combined LSEG's extensive data set with our innovative platform to provide and drive more comprehensive and verifiable ESG data and scores. LSEG are marketing the enhanced platforms under the LSEG brand name to customers across the world,” says Miller.

Why LSEG chose ESG.AI Technologies’ platform

To explain why LSEG is so keen to work with ESG.AI, we thought it best to leave this explanation to Miller himself, who says: 

“We address the shortcomings of other ESG systems – opaque scoring, inconsistent, inaccurate, and old data – by utilising LSEG’s best-in-class ESG data set and the innovative data collection capabilities of our platform.

The platform enables the most up-to-date, accurate and complete data set on the market. Its data is reviewed, verified, and validated by over 200 LSEG analysts before it is distributed.

An important unique feature of the platform is its ability to estimate ESG scores, using the LSEG scoring algorithm, based on updated or projected data. We have found that this capability encourages companies to really engage in the process, as they are able to immediately see the impact of improved data, rather than treat it as just a box tick exercise to get through, and it also enables companies to ensure that their ESG performance is accurately reflected in their ESG score.” 

Working with the financial institution will bring about a whole host of benefits and allow ESG.AI to target some of the key corporations across multiple sectors, making it a core solution for banks, consultants, asset managers, insurance providers. This also plays into the current trends as more and more businesses like these look to find reputable ways of reporting their ESG achievements to various stakeholders in line with the EU Corporate Sustainability Reporting Directive (CSRD). 

“We created our platform with this in mind,” says Miller. “It utilises LSEG’s best-in-class data set and a new collaborative data collection methodology that involves corporates in the data collection process.” 

The result is a collaborative effort with a major power across industries and a future stakeholder for ESG.AI that will not only provide great insight for its platform but influence the need for its AI-driven solution among many other businesses. 

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