Northern Trust has further enhanced its suite of environmental, social and governance (ESG) investment analytics to deliver new climate risk reporting for global institutional investor clients.

The Climate Focus Report, part of Northern Trust’s ESG Insights suite of reporting solutions, offers clients a range of carbon metrics, physical risk and transition risk detail at the portfolio level. These include detailed emissions information (including Scope 3), carbon intensity measures and forward-looking scenario pathway analysis.

The resulting information supports institutional investors, such as pension funds – helping them assess key climate change risk factors against investments in their portfolio and compare them against representative benchmarks for absolute and relative analysis over time.

It also supports clients’ internal oversight and external disclosure obligations through its alignment with the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) reporting recommendations.

This latest addition to the ESG Insights service, launched and further enhanced last year, follows a recent enhancement to Northern Trust’s Performance Measurement service through the integration of ESG scores into its investment analytics tool, RADAR^TM. Clients can now access insights into potential links between ESG performance and investment performance by using new views created to show returns grouped by individual E, S and G pillar scores, in addition to an overall ESG score breakdown.

Serge Boccassini, product lead, Investment Accounting and Analytic Solutions at Northern Trust, said: “As sustainability-focused monitoring requirements grow in number and become more complex, these solutions are intended to help institutions meet their obligations for assessing and reporting on both ESG and climate risk. This is the latest example of how Northern Trust is deploying its technology and analytics expertise to help clients integrate ESG considerations into investment decision-making.”

Northern Trust’s Climate Focus Report is generated by combining global custody asset information with data provided in partnership with ISS ESG, the responsible investment arm of Institutional Shareholder Services (ISS), a global provider of investment stewardship solutions.

Maximilian Horster, head of ISS ESG, comments: “ISS ESG is delighted to provide climate data to support Northern Trust’s Climate Focus Report at this critical time for institutional investors, who require the highest levels of transparency and data quality to meet rapidly-evolving climate risk assessment and reporting obligations.” 

Northern Trust’s ESG Insights solutions are delivered via its Investment Risk & Analytical Services (IRAS) group, which supports over US$9 trillion (as of 30 June 2021) of investments by asset owners and asset managers around the world. With consultants in Chicago, London, Basel, Amsterdam, Abu Dhabi, Singapore and Melbourne, IRAS provides performance measurement, risk analysis and investment compliance monitoring and private markets analysis for clients – enabling them to gain greater insights into their investments for more informed decision-making.

Source: Northern Trust