Data-led ESG platform has been developed to help investors reduce data gaps particularly evident in Social and Governance factors linked to Diversity & Inclusion
GaiaLens launched this week its real-time, data-driven and transparent ESG scoring analytics platform for portfolios and stocks worldwide. GaiaLens’ ESG analytics platform sources and scores unstructured, independent third party data as well as more traditional self-reported data across all key ESG factors. The platform has been designed to help asset owners, asset managers and pension trustees to fill ESG data gaps and test the self-certified ESG claims of publicly-listed businesses.
GaiaLens’ own research found less than 10 per cent of public companies are currently providing key Social and Governance data needed for ESG disclosure including providing statistics on gender and ethnic diversity representation on their boards of directors. This is despite the growing evidence on both sides of the Atlantic that companies with larger gender and ethnic diversity at senior level within organisations, on average have higher share price performance1, better risk management2 and endure less fraud3.
Currently within the S&P 500, women only hold a third of board seats and six per cent of companies are run by women. This status quo is set to change rapidly across industries now that the SEC has approved a rule from Nasdaq that all newly-listing companies must have at least two diverse board directors or explain why they don’t.
Some US states have already passed legislation that requires certain levels of board diversity. For example, in California on 30th September this year new regulation AB979 was enacted mandating that larger firms’ boards, if headquartered in California, must have two or three minority directors on their boards by the end of 20224.
At launch, GaiaLens has deep ESG-relevant data for approximately 16,000 public companies. All data is compiled, measured for consistency and transparency and scored in real-time equally across the E, S and G pillars. Its data sources and analysis are equally detailed across all three pillars.
In its Social ‘pillar’ alone, GaiaLens runs extensive data searches against three core Themes and 45 Features. Once all available structured and unstructured data is gathered, it is scored via its own proprietary algorithm. At each point of aggregation, GaiaLens can show the user where the numbers come from and allow them to drill down or drill up through its analytics system.
However, GaiaLens has spotted that as regulation has tightened up in specific areas like Diversity and Inclusion reporting, more and more asset owners are complaining that they are struggling to gain access to reliable Social and Governance data to enable them to meet these new reporting requirements.
The ESG platform provider also noted that on this side of the Atlantic, rapid adoption of EU Taxonomy is simultaneously putting a great many asset managers and asset owners under strain as they struggle to get access to data of sufficient quality and depth in some areas which EU Taxonomy will demand.
Although the EU Taxonomy directives do not have to be written into national law until the end of 2022, many asset owners and managers are already demanding public companies begin providing data in line with EU Taxonomy reporting requirements.
Gordon Tveito-Duncan, co-founder and head of ESG Technology at GaiaLens, commented:
“As we get closer to EU Taxonomy deadline for reporting there will be a growing realisation that asset owners, asset managers and pension trustees do not have all the information they need to accurately assess firms’ ESG performance. As well as asking these firms to supply key ESG data they may also want to strengthen their scrutiny by accessing verifiable third party data.”
GaiaLens collects and aggregates data from a substantial number of NGOs as well as from popular employee review websites, court records and much more. It focuses on finding and placing a uniform value on data coming in from multiple trusted sources.
Gordon Tveito-Duncan again:
“You cannot change what you cannot measure. There are two key elements in enabling ESG performance measurement: being able to access the fullest possible amount of data in real-time and using the latest technology to analyse and score that data in a highly reliable, consistent and systematic way. That’s what GaiaLens does to help make ESG performance measurement easier for investors.”