The Wall Street Journal reported that two professors and UBS are working to develop a tool to measure the impact that companies are actually having on sustainable goals. The objective is to allow investors into the next stage of sustainable investing by developing metrics that focus on environment, social, and corporate governance standards. The effort began with a request from a European pension fund to determine which companies in its portfolio were actually affecting change.
According to the article, the effort is six months into what is anticipated to be a two year process. The effort at this stage is concentrating on metrics that can be applied on a broad scale to determine a company’s next impact on climate, water, and health. Development of the metrics is relying on publicly available data from the companies, together with information from the government and academics. While the initial effort is focusing on the companies in the pension fund, those working on the project hope to develop something that can be scaled to apply across multiple industries and companies.
The professors developing the product intend to invite academic scrutiny regarding the effectiveness of the product in order to increase investor confidence. The professors also hope that a company’s score will be shared with the company to open a dialogue about how a company can improve its impact.