A new ‘golden source’ for environmental and social governance (ESG) data will help listed firms decide where they put their money, and even what their values should be.
Nina Spencer saw a gap in the market after more than 15-years sitting on company boards and advising leading fintech firms.
Her new analytics and benchmarking database, Addidat, seeks to “arm the leaders of businesses” with valuable information, which informs where they put their cash.
She came up with the idea after sitting on various top boards, advising them on business decisions. They were “all having the same conversations and are raising the same questions”.
She said board members “don’t know what or how to prioritise” ESG goals, but data can be the answer.
Whether deciding on sustainability and being green, or the gender pay gap and modern slavery statements, Addidat shows firms “what is happening in whatever kind of dimension of the market” a company is looking at. It also shows firms comparisons “against all of the other organisations listed on AIM that are in the industry sector.”
But how does it work?
Using a sophisticated AI system, it gathers live information on everything ranging from annual and sustainability reports to contracts and board information on company websites
The data is pulled “into a single golden source”, Spencer says, and because it’s freely available, there is “no market sensitive data” or figures that are “dependent on interpretation”.
As companies release more information, this ;golden source; is updated automatically, which excites Spencer because over time Addidat “will become of more value”.
“Being able to build that historic data set a year on year” will help clients view trends.
One goal of Addidat is to help firms “avoid wasting money on investing in ESG” goals which “might be here today, but we don’t know whether they’re going to be the ones tomorrow”.
ESG needs are “evolving so quickly”, she said, the real “power of the data will to enable organisations to unlock a much clearer view of what it is they’re trying to do and how.”
In some companies, she said ESG is “kind of guesswork” whereby there “might be one person or one team of people.. with a really deep passion about wanting the company to be carbon neutral by 2030” for example.
“So suddenly, this thing goes up to leadership forums, and it’s like ‘someone said we need to think about being carbon neutral by 2030’. That kind of statement is just thrown out there”.
“But no one can give them any context” about what others are doing or what being carbon neutral would involve, or what international targets are.
What role does Addidat have in the future though?
Nina said even if investors look at Bloomerg or Reuters, information about ESG can be “quite patchy” and isn’t all in one place.
In collating all the available information, she is pursuing a bid to “arm the leaders of businesses with really valuable information and data”.
“Articulating to them how best to spend that money is the value” in this data being available.
It’s not only firms themselves which would benefit from having a clearer picture on ESG, however. She says there are three drivers for meeting environmental and social governance goals, namely regulatory, investors and employee needs.
There is now “an intrinsic hygiene factor” when it comes to ESG, so that an organisation, investment fund or investor is “not going to fail” of ethical requirements.
“It’s not greenwashing”, she said. “It’s datasets.”
Investors are the biggest driver, and “even in this tough market.. I don’t think we’re going to forget to worry about the environment”.
Asked if Addidat is effectively acing as a regular might do, shining a light on companies’ ESG shortcomings, she agreed. Spencer wants to go to companies and “tell them really effectively and quickly.. the gaps” in their targets.
Looking to the future however, she said “I don’t want to become a regulator. But I think I think increasing the regulatory requirements for organisations will be key, and it will happen.
“So this will help facilitate those conversations.”