Published  9 MIN READ

A Quantum Leap Forward in Data-Driven ESG Scoring

A successful pilot managed by Surecomp has shown that ESG scoring can now be applied at the individual trade finance transaction level, opening up a world of possibilities for corporate treasurers to support sustainable global trade.

The 2022 edition of the United Nations Climate Change Conference, known as COP27, opened on 6 November in the Egyptian city of Sharm El-Sheikh. Picking up from the event’s previous instalment in Glasgow last year, leaders from around 200 countries are meeting to discuss sustainability strategies and how best to tackle the global climate crisis.

Many of the issues under discussion will strike a chord with corporate treasurers because they are often in a position to support or even influence ESG goals within their organisations. This is usually through the use of ESG-linked financial instruments. For example, research from law firm Linklaters[1] found that a total of 835 green bonds have been issued globally since the start of 2022, raising $245bn, following a record year in 2021 when green bonds raised $572bn. Beyond bonds, treasurers can also use a growing variety of green deposits and sustainability-linked loans, while a number of MMFs claim ESG compliance.

It can be more challenging for the treasurer to exert their influence on ESG with the organisation’s external partners, specifically the supply chain. The practices of suppliers and the sheer logistical challenge of shipping goods and materials worldwide might seem too complex to grapple with for a treasurer focused on managing cash flow and financial risk. However, a recent successful pilot project illustrated how treasurers could use data to support organisational ESG goals and green the supply chain.