9fin, the leading leveraged finance (LevFin) intelligence platform, has published a comprehensive report on the state of ESG reporting within LevFin markets.
The report comes alongside 9fin’s new ESG Company Data product launch. The report looks at how industries compare when reporting key ESG data points. The report finds that Real Estate, IT and Healthcare are lagging behind other sectors, collectively reporting an average of only 3.4 of 11 key ESG data points.
These findings come just weeks before the Sustainable Finance Disclosure Regulation (SFDR) is set to enforce the mandatory disclosure of 14 data pointsknown as the Principal Adverse Impact (PAI) indicators. This new regulation will impact Financial Market Participants (FMPs), including asset managers, banks and fund brokers.
To date, ESG disclosure from LevFin issuers has generally lagged behind their Investment-Grade counterparts. On average, these issuers report fewer than 5 of 11 key ESG data points (45%), but certain industry sectors are bucking this trend with some energy companies reporting more than 7 data points,as the graph below illustrates. Although we do note that the energy companies in this initial survey only consisted of a small sample size with just four companies.
Jack David, Senior ESG Analyst at 9fin, said: “When it comes to reporting ESG information, Leveraged Finance companies are behind the curve. Our report shows that some sectors are lagging further behind than others. With new SFDR regulation quickly approaching, it is vital that businesses start prioritising their ESG reporting and investors make every effort to obtain as much data as they can.
“We know there is a huge demand for high quality ESG information in this growing area and we are delighted to work with our stakeholders across the LevFin community to address this gap. Our new ESG Company Data adds to our growing suite of ESG products.”
9fin has analysed thousands of sources to build its new ESG Company Data product. It offers standardised ESG information, with the ability to trace all data points back to their original source.