Climate crisis has made environmental, social and governance factors a force in investing: Asset managers managing over $3 trillion of institutional assets use ESG scoring systems to track their potential investment targets’ behaviour regarding environmental, social and governance factors.
Chris Hohn, the head of hedge fund ICI, has announced to vote against the directors of companies that fail to reveal their carbon emissions. European Central Bank’s new head, Christine Lagarde, considers using monetary policy and bank supervision to actively fight climate crisis; a move that would involve assessing which firms are dirtier than others. A big challenge in using ESG scores is that, unlike credit ratings, ESG scores used by different ESG rating companies are poorly correlated with each other.
And, interestingly enough, tobacco and alcohol companies rank near the top of many ESG rankings - since it does not matter what the companies are selling, it only has to be done in a sustainable way. For instance, in FTSE Russel’s ESG rating, electric auto manufacturer Tesla performs worse than companies that produce gas-guzzlers.
In short - a standard is needed. Over the last few years, big credit ratings firms have either built their ESG ratings in-house, or acquired smaller ESG rating systems. That allows to hope that ESG scores will be usable in the near future.
With its XSC Smart Wallet, Datarella is offering a handy solution for enterprises to measure the CO2 emissions of its employees, and the CO2 savings of employees who use public transport, ride their bikes or choose another emission-friendly approach to transit to and from work. The XSC Smart Wallet can measure employees’ CO2 emissions, as well as activity data, and incentivises them to behave in a good manner by rewarding them with digital coins - hence "XSC" - that can be exchanged with food and beverages in the company’s cafeteria. By providing both, a measurement of environmental and activity data of its workforce, a company is able to use the XSC Smart Wallet as a handy, reliable and fun-to-use instrument to improve its ESG score.
If you want to know more about the XSC Smart Wallet, where its is already in use and how you could use it for your company, please contact us!