CAMRADATA Analytical Services and BofA Merrill Lynch Global Research have launched Environmental, Social and Governance (ESG) Geographic Portfolio Analysis, an insight service for investors to track and understand ESG exposure within their portfolios.
The service helps institutional investors, such as pension funds and insurance companies, identify how their international portfolios may be exposed to ESG factors compared to their benchmark.
What makes ESG Geographic Portfolio Analysis stand out from existing offerings is the clear output report and scope of the two databases on which it draws. The first database contains a geographic breakdown of sales revenue, assets and operating income of more than 4,000 companies. This is combined with a second database containing rankings of 214 countries (grouped into 54 world regions), according to 172 underlying ESG risk indicators relating to environmental, social and governance factors.
The service examines ESG factors that fall under 28 themes ranging from climate change and water scarcity to health issues, as well as governance-related issues such as business rights, corruption, and strength of democracy. The data used by ESG Geographic Portfolio Analysis to evaluate these factors are derived from numerous reputable and authoritative international sources.
“Investors increasingly recognize that environmental, social and governance factors may influence long-term financial performance,” said Sarbjit Nahal, SRI analyst at BofA Merrill Lynch Global Research. “This new service measures the geographic ESG exposure of any portfolio, enabling investors to have a greater understanding of ESG factors that are at play within their portfolios.”
Analysis by geography, sector and stock
Through the service, investors can request reports that identify types of ESG exposure by country or region, by sector and individual stock. For example, a report could highlight and compare ESG risk factors for telecoms companies in a variety of emerging markets. “ESG Portfolio Analysis goes further than any previous tool in helping investors understand the geographic ESG exposures in their portfolios,” says Steve Butler, managing director at CAMRADATA Analytical Services. “It can also allow institutional investors, such as pension fund trustees, to compare ESG risks across apparently similar global equity funds and against benchmark indices.”