The use of ESG data was a frequently discussed topic across many of the panels during Barclays’ 2020 ESG conference, with agreement that additional investment in alternative data will be required both by the investment community and corporates.
This included the growing role for satellite imagery and location intelligence when considering targets relating to supply chain monitoring and wider environmental topics like biodiversity and agricultural practices. The shift towards more real-time analysis was also discussed, including the use of artificial intelligence (AI) and natural language processing (NLP) by both existing and new ESG data providers.
Use cases ranged from sentiment analysis algorithms (analyzing the tone of conversations to infer how committed a company appears to be about mitigating ESG risks) to developing more sophisticated risk management tools, eg, ESG controversies, social media tracking.
On the “Looking ahead to 2021: Key themes in ESG investing” closing panel, speakers highlighted their collaborative works using AI technology to assess to what extent portfolios contribute to the UN’s sustainable development goals (SDGs) using an auditable standard. While having more data was generally agreed upon as being favorable, panelists also agreed that human overlay was equally important within the overall process, highlighting the importance of ESG training.