A quartet of partners has launched ESG Validation and Assessment, a new London-based limited liability partnership, which will assess and validate ESG criteria for investors.
The new organisation will provide the investment community, including banks, with “independent, consistent and evidence-based assessment of ESG performance, and validation of claims in the ESG profiles of companies”, it says.
The partnership is being led by Richard Burge, an independent advisor on international affairs and commerce with a focus on trade, conflict and development. Burge was chief executive of the Commonwealth Enterprise and Investment Council from 2017 to 2019, and was previously chief executive of Wilton Park (a Foreign and Commonwealth Office agency for conciliation and dialogue on global issues). He has also been the CEO of the Countryside Alliance and director general of the Zoological Society of London.
Burge is joined by Alexander Malaket, president of Canadian consultancy Opus Advisory Services International, which focuses on international business, trade and investment with a specialism in trade and supply chain finance and trade-related international development.
Tim Morris, career diplomat, who has worked on bilateral and multilateral policy and the promotion of trade and investment, and Mark Infield, independent consultant with a focus on the environment, ecosystem services and biodiversity, make up the foursome.
“The idea is to try and present an independent voice for investors that are looking to assess to what extent their investment ‘targets’ have been true to their ESG claims,” says Malaket, speaking to GTR on the sidelines of Sibos in London this week.
Beyond that, the group is still in the process of finalising its value proposition, including determining its accreditation process and technology needs – if any.
“One of the conversations we’re having is to explore whether we can leverage an existing accreditation process or whether we need to create our own assessment process,” Malaket explains. “It will be about finding a unique niche that our particular combination of expertise can address. So, for example, in the supply chain space, and the financing of supply chains, that’s collectively something we have unique competency in, so we think we can carve out an interesting proposition.”
The context of supply chains is one of the areas where the group sees great potential. “You can envision a situation where you would need to do an assessment on a prospective investment to prove that not only are you in line with your own ESG philosophy, thoughts and messaging, but that your suppliers and the service providers in the ecosystem around your supply chain – where you will ultimately have some responsibility – are also aligned to some degree,” Malaket says.
He explains that the ESG character of investment opportunities is becoming increasingly important as a means of bringing together today’s tremendous amount of capital looking for a home, with people’s growing desire to “do well” with their investment choices.
“The ESG piece will connect those dots very naturally, and will very directly impact the way capital flows in to ESG-aligned opportunities.”
The need to drive more transparency in global supply chains and encourage sustainable production processes continues to grow. Earlier this month, a consortium of international banks, corporates, fintech startups, an NGO and a research institution released a new model for blockchain-enabled sustainable supply chain finance, called Trado. Led by the University of Cambridge Institute for Sustainability Leadership (CISL), the group includes BNP Paribas, Barclays, Rabobank, Sainsbury’s, Sappi, Standard Chartered, Unilever, as well as technology companies Provenance, Halotrade and Meridia, and IDH, a sustainability NGO.