Robeco, The Investments Engineers
blue circle

23-03-2022 · インサイト

Understanding sustainability beyond the data

The drive to reach net zero emissions has placed greater emphasis on gathering reliable data – and lots of it.

    執筆者

  • Morgan Williams - ESG Data Strategist

    Morgan Williams

    ESG Data Strategist

The lack of sufficient quantities of accurate data for emissions and other areas of sustainability such as biodiversity or resource use has led some to question whether it can ever paint a true picture of corporate activity.

It is therefore important to understand the purpose of measuring success in sustainability beyond simply number crunching, while using the data that can be obtained as a means to an end, says Robeco’s SI Data Strategist, Morgan Williams.

Robeco recently expanded its data catalogue by buying in much more risk rating and other sustainability data to complement existing internally curated data such as the Country Sustainability Ranking and SDG Score.

One area in which this kind of strengthening of data gathering capabilities is likely to prove invaluable is in trying to measure the Scope 3 emissions of companies, as investors pursue net zero carbon targets. These are emissions that occur along the value chain of a product, such as the driver of a car, rather than those of the car manufacturer (Scope 1), or the energy used to make it (Scope 2), which are fairly simple to collect.

Making it better

“The real problem here is that there are not yet enough people looking at Scope 3 data, poking holes in it and asking questions of it to make it better,” says Williams, himself a new addition to the Robeco SI Center of Expertise. “This is one of the reasons why we’re now using more external data to try to plug this gap.”

“But it’s not just a case of buying in data from wherever you can find it. All data by definition is backwards looking, which won’t help us in trying to figure out whether a company is on track to meet net zero targets.”

“One solution here is to use more forward-looking projections, but this has its own problems – at the end of the day, ‘forward-looking data’ is just forecasts.”

A thought process

Making sense of the data is another challenge; how to work with vast sheets of numbers? “It's a thought process like anything else,” says Williams. “The term ‘big data’ gets thrown around quite a lot, but what we're really looking at is small to medium-sized data.”

“Then there are challenges when working with it – we still have to work out how to link everything together. It's far more complicated than you might imagine trying to bring together three providers into one big table to create a view. They often provide data using different identifiers, methodologies and terminology may not always align perfectly and each provider might apply treatments such as corporate actions in their own custom way.”

“But when you have it all together and can do some grouping, you can start to assess whether or not there are outliers. We go through a lot of the standard data exploration processes, making assessments to gain an initial sense of the larger set of information. We then dive into further details when we have a particular question that we want to answer.”

Looking for big patterns

Knowing what to look for can help answer that question. “For something like Scope 3 emissions, we first start to look at big patterns that we can see and then we might dive into a particular area like hard-to-abate sectors.”

“We will ask ourselves: how does the information look there? Are there any differences in, say, regional disclosure, within a particular group of companies, or over time? How have these differences changed? We’ll look for things of this nature.”

“We try to make use all the different tools at our disposal to make those assessments to come up with something that can answer the relevant question.”

Using enterprise value

One change in data analysis has been the move away from measuring emissions or other sustainability metrics against a company’s revenue – the so-called intensity approach. Data analysts now compare it instead to enterprise value including cash (EVIC) – a company’s stock market capitalization plus its cash and debt – the so-called ownership approach.

“Previously people were doing the best with what they had, comparing things like emissions to revenue,” says Williams. “Now we use enterprise value as the basis for our decisions because it gives a much clearer picture of our ‘ownership’ of those emissions across all types of investments, be it equities or bonds.”

“The other thing that enterprise value does is take into account what companies are doing irrespective of the business cycle. It is more reflective of the size of the firm, whereas revenue can fluctuate depending on a whole host of different factors. So, overall we think this is a is a better metric over and above revenue.”

Speaking the same language

Having a common framework would also help; an argument that lies at the core of defining sustainability itself. Efforts are now being made to try to standardize metrics or impacts in a way that will make it easier to compare emissions data.

“A good basic framework is very important as it allows people to speak the same language,” says Williams. “That doesn't mean that we need to have every single data point exactly the same from every single provider. But a meaningful standard does allows you to do comparisons and be consistent over time.”

“I think that we're getting to a point where that's starting to come to the fore. The EU is making big strides in this space, with the Taxonomy set to be a major milestone in how we define sustainable investing.”

Major breakthrough

Another breakthrough came at the COP26 climate summit with the announcement of the creation of the International Sustainability Standards Board.

“This group, part of the International Financial Reporting Standards foundation, will deliver a comprehensive global baseline of sustainability-related disclosure standards, much like what exists today with financial accounting,” says Williams.

“It is huge step in the right direction, reducing the alphabet soup of the different ESG standards into a single one that we can get behind. That way we can stop arguing about what to measure, and then actually just start capturing it and analyzing it.”

A lame excuse

The lack of data has sometimes been used by companies and investors as a reason to avoid adopting sustainability. “That’s a lame excuse for people to blame the data when saying no to sustainability,” Williams says.

“There is no perfect data, but there is enough out there that is perfectly usable. Data generally speaking can still be captured and gaps or inconsistencies can be worked through. So this should not put off any investor from adopting sustainable investing one iota.”

“By having more people look at data and accordingly with more people understanding it, and with the advent of the Sustainable Finance Disclosure Regulation (SFDR) more clearly defining the requirements for sustainability, it will become clearer about what it means for a company to be a sustainable investment.”

サステナビリティに関する最新の「インサイト」を読む

ロベコのニュースレターにご登録いただくことで、いち早く最新のインサイトを入手し、環境に優しいポートフォリオの構築にお役立てください。

最新情報を受け取る

重要事項

当資料は情報提供を目的として、Robeco Institutional Asset Management B.V.が作成した英文資料、もしくはその英文資料をロベコ・ジャパン株式会社が翻訳したものです。資料中の個別の金融商品の売買の勧誘や推奨等を目的とするものではありません。記載された情報は十分信頼できるものであると考えておりますが、その正確性、完全性を保証するものではありません。意見や見通しはあくまで作成日における弊社の判断に基づくものであり、今後予告なしに変更されることがあります。運用状況、市場動向、意見等は、過去の一時点あるいは過去の一定期間についてのものであり、過去の実績は将来の運用成果を保証または示唆するものではありません。また、記載された投資方針・戦略等は全ての投資家の皆様に適合するとは限りません。当資料は法律、税務、会計面での助言の提供を意図するものではありません。 ご契約に際しては、必要に応じ専門家にご相談の上、最終的なご判断はお客様ご自身でなさるようお願い致します。 運用を行う資産の評価額は、組入有価証券等の価格、金融市場の相場や金利等の変動、及び組入有価証券の発行体の財務状況による信用力等の影響を受けて変動します。また、外貨建資産に投資する場合は為替変動の影響も受けます。運用によって生じた損益は、全て投資家の皆様に帰属します。したがって投資元本や一定の運用成果が保証されているものではなく、投資元本を上回る損失を被ることがあります。弊社が行う金融商品取引業に係る手数料または報酬は、締結される契約の種類や契約資産額により異なるため、当資料において記載せず別途ご提示させて頂く場合があります。具体的な手数料または報酬の金額・計算方法につきましては弊社担当者へお問合せください。 当資料及び記載されている情報、商品に関する権利は弊社に帰属します。したがって、弊社の書面による同意なくしてその全部もしくは一部を複製またはその他の方法で配布することはご遠慮ください。 商号等: ロベコ・ジャパン株式会社  金融商品取引業者 関東財務局長(金商)第2780号 加入協会: 一般社団法人 日本投資顧問業協会