Toronto-based tech firm Surecomp is expanding its focus from providing trade finance systems to banks and corporates, to using its network to consolidate and standardise disparate ESG scoring and tracking services for trade.
Using its collaborative platform, Rivo, which it launched earlier this year in an effort to bring together an ecosystem of importers, exporters, banks, insurers, shipping companies and solution providers through API connectivity, the company is providing new functionality that allows transactions to be independently scored according to pre-defined criteria based on feeds from numerous environmental, social and governance (ESG) data providers.
The providers include European ESG and credit analytics company Scope Group, maritime intelligence firm Windward, attestation platform KYG.Trade and Coriolis Technologies – which this week launched what it calls the first fully automated and standardised tool for measuring ESG factors and sustainability.
For each trade transaction, Surecomp’s Rivo brings together each of the providers’ datasets and methodologies to cover numerous ESG metrics, and uses a scoring algorithm to combine these inputs to provide one transaction-based rating according to pre-defined criteria.
“We are delighted to support this innovative initiative with both corporate ESG Impact Review and our extensive data on maritime routes and vessels, taken from our Ship Review flagship product,” says Ralf Garrn, managing director at Scope Group, which is bringing maritime logistics sustainability data as well as information on the environmental and social impacts of a company’s economic activities into the offering.
The criteria that Surecomp is using to standardise its scoring algorithm will align with the International Chamber of Commerce’s (ICC) sustainable trade and trade finance framework, which is currently being piloted on the basis of a simple matrix to determine whether the different elements of a transaction are sustainable. Surecomp, which is participating in the ICC’s pilot, says it has proved its solution works after testing it on a dataset of more than 1,000 transactions across numerous trade routes, covering more than 700 corporates and hundreds of goods.
“Every data provider has their own individual commercial ESG ratings service,” Enno-Burghard Weitzel, Surecomp’s senior vice president of strategy and digitisation, tells GTR. “But on an aggregated basis, we can all agree on the ICC framework. That’s the standard. We are asking all the rating agencies to provide a translation of their individual standard to that ICC standard, and we then combine them at the transaction level.”
“This marks a change to our approach as a company,” he adds. “We started as an IT vendor, but we are now a data provider and aggregator. This is in response to the way the industry is changing; we need to integrate deeper into the value chains of banks and corporates to provide a real service to the community. All of the discussions we have had with the industry, both through our own network and with the ICC, have highlighted the need people have to measure, prove and improve their ESG performance, but what is missing is the ‘how’. What we are doing is bringing together the data and the evidence base to address this.”
This development comes as exporters and banks alike come under increased pressure to measure and monitor the ESG impact of their activity. A recent study by Coriolis Technologies that mapped global trade flows against the United Nations’ Sustainable Development Goals found that the majority of the world’s exports are negative contributors to sustainability, while a paper from the ICC last month called for better efforts to ensure trade meets its potential as a tool against climate change, poverty and inequality.
“A big concern for us is greenwashing,” Sivan Bender, Surecomp’s digital innovation and partnerships director tells GTR. “The beauty of our solution is that we’re solving two challenges for two different groups. Banks want to be able to understand their financial risk and how they can actually enable change. The ICC framework provides a simple score that makes it very easy for them to see whether a transaction is sustainable or not. Corporates, meanwhile, need to be able to provide the data to get the score, and this is a huge task. We are taking the corporate name, the goods description and the transaction data, and feeding it through the different rating companies, and automatically creating that score, which then empowers them to actively manage their trade related ESG profile and monitor the environmental and social impact of their business.”
Surecomp says it now aims to launch the offering into live production by the first quarter of next year.