The role of finance in sustainability cannot be understated. When capital reaches sustainable enterprises and companies are rewarded for sustainable behaviour through investment, it is the world that reaps the benefits. Such decisions, however, can only be made in the presence of accurate, understandable information. Refinitiv is the leading provider of environmental, social and governance (ESG) data. Founded in 2018 out of Thomson Reuters’ Financial and Risk unit, the company has taken advantage of its rebirth to institute an ambitious sustainability strategy. At the same time, it is putting sustainability at the heart of its business model, offering customers the sustainability data they need to make the right decisions to drive positive and sustainable business outcomes. Luke Manning, Head of Sustainability and Strategic Initiatives, has worked for the company since the Thomson Reuters days and has overseen the positioning of sustainability at the core of the firm’s operations.
“We look at sustainability through two lenses,” says Manning. “The first is how we operate as a business ourselves, and how we measure our own impact. The second is how we drive sustainable behaviour beyond the boundaries of our own footprint.” Internally, Refinitiv seeks to hold itself to account across a broad range of factors, from efficient use of resources and recycling to community and charity support. “Activities that traditionally sat under a corporate responsibility banner now form part of our sustainability strategy,” explains Manning. Not content with altering its own behaviour, however, Refinitiv looks outward with its concept of ‘Sustainable Leadership’. “We want to make sure we stand ourselves up as a responsible business – but what do we do as a business that also contributes to the greater good? That’s where our data, technology and expertise come in. We have positioned ourselves at the heart of an ecosystem of change makers, and use our data to empower investors to shift towards sustainable finance. If we can do that, it really starts to unlock something that is meaningful at scale.”
Internally, Refinitiv has instituted specific, time-dependent targets. “We’re going to be carbon neutral by 2020,” says Manning. “We’re going to be 100% powered by renewable energy by in the same timeframe, and we’re going to reduce our own carbon emissions by, on average, 10% every year for the next five years. We have to hold ourselves to account; we have to put a marker in the ground that says ‘that's what we’re aiming for and this is why we’re aiming for it’. If you don’t set targets, that’s when things slip.” As part of its commitment to representing and supporting the communities in which it operates, Refinitiv has also promised to double its community investment programme engagement by 2020, as well as have 40% of its senior leadership roles filled by women.
The organisation’s targets dovetail with the UN’s 17 Sustainable Development Goals (SDGs), but for Manning, simple alignment is not enough. “We’re trying to focus on the targets beneath the logos. There are 169 underlying targets, and they are a lot harder to hit.” To achieve this, Refinitiv’s sustainability team coordinates global, centralised campaigns as well as local action via volunteer teams. “It could be beach cleaning in the Philippines, or mentoring schoolgirls in India,” he says. “That’s where the real, true value of measuring the impact of those SDGs comes through.”
The spirit of using targets to drive performance extends to Refinitiv’s product offering. “It’s always healthy to benchmark performance; ESG is no different,” says Manning. “We have over 400 metrics that drive transparency and comparability in the market and that can only be a positive.” Beyond holding companies to account, having an idea of competitors’ performance can have a clarifying effect. “If you know what you’re comparing against, you have a frame of reference, and it's much easier to make a decision. What data does is drive clarity, and it’s clarity that can drive decisions. If you don’t have that data, all you’re really going on is an opinion.”
Manning hasn’t encountered any lack of appetite for sustainability at Refinitiv. On the contrary, some of the challenge has simply been ensuring that enthusiasm translates into definitive action. “There's absolutely no shortage of buy-in and support from across the business for the sustainability work – right the way through from the CEO to the front line. Every day there are new ideas originating throughout the business. It’s about how we bottle up that enthusiasm and keep up the momentum.” Such is the prominence of sustainability at the company that it even plays a role in attracting talent. “It’s a given that sustainability is the right thing to do, and that’s what people are demanding now. At every point in the induction lifecycle when people decide to come and work here, these are the questions that come up increasingly frequently: ‘What do you stand for? What are your policies, your goals and your pledges when it comes to environmental and social initiatives?’”
The community nature of sustainability at Refinitiv can in part be credited to its youth. “As a standalone business, we are still brand new,” says Manning. “We’re not even a year old yet. It’s really a privileged position to be in, to be able to make sure that sustainability is at the heart of building our culture and our values.” It’s clear that the opportunity has been comprehensively harnessed at Refinitiv, but in line with its dual concept of sustainability, Manning stresses the need for others to do the same, and the company provides the tools to achieve just that. “Collective action is our mantra for this. Data underpins the process and our tagline is ‘data is just the beginning’. We have a part to play, but we need to do it with everyone else – whether that’s other businesses, partners, competitors, governments or individuals – we all have to do it together to solve it. We’ll make sure that when it comes to the provision of data and analytics, we’ll absolutely be best in class.”
“Sustainable finance is shifting funding to investments that take more than just financial considerations into account – investments which put a value on environmental, social and governance (ESG) factors” says Manning. Refinitiv offers the tools to make sustainable finance a reality for its customers across a range of ESG data and risk products. “If a customer is looking to invest in these sustainable initiatives, we provide the transparent data and analysis to allow comparability. This is fundamental in reorienting capital to sustainable investments.”
The company’s ESG data must overcome some hurdles to achieve parity with its more conventional financial data. “Globally, there’s very inconsistent reporting on ESG data. When financial institutions come to weave these data points into their proprietary models, it’s still quite hard to do so unless you provide a degree of standardisation and harmonisation” says Manning. This is where Refinitiv’s work comes to the fore, ensuring that data is transparent, usable and relevant. The more ESG data is used, the more its prominence increases and the higher its quality becomes, as Manning explains: “Now, corporate, regulators, institutional investors and capital rating professionals are all becoming increasingly aware of the importance of ESG data. That’s driving up the standard as they’ll have to use it day in, day out to get positive financial outcomes.”
Refinitiv is trusted not only to provide this information, but to present it in the manner required by its customers. “We’re the leading provider of ESG data. We cover 8,000 companies, represent 70% of the global market cap and have over 400 data points included. We also carry information on ESG bonds, loans, carbon and renewables pricing data and financial crime information. This all aggregates to provide a bigger picture,” Manning explains. “For example, we create a composite score consisting of environmental, social and governance pillars, and things like ESG controversies. We take that data, we make it valuable and useful, and then present it in such a way that it can be easily consumed at speed and at scale.” The global reach of Refinitiv’s data has seen the firm partner with organisations including the European Commission, the United Nations and the World Economic Forum. With the latter, they have created the Sustainable Leadership Monitor, an analytics app which allows the measurement of the long-term sustainability progress of publicly listed companies, underpinning Refinitiv’s commitment to providing the information necessary for collective leadership and decision making.
Ultimately, Refinitiv’s clear and comprehensive strategy ensures the cause of sustainability is placed at the very heart of its business model, with the values it holds being translated into clear goals. These goals then help to inform and create the culture of company-wide participation and passion for sustainability, which itself is integral to the sustainable finance products and services it provides. Such clarity of purpose is vital when facing the rapidly evolving, unpredictable challenges sustainability presents. “From an environmental perspective, it’s clear that we have this increasingly narrow window to address the threat that we face,” says Manning. “Current models of consumption and industrialisation are not going to support the exponentially growing population. If you look at what businesses face, particularly, there’s a new paradigm that requires the creation of long-term practices that respect the environment, the wellbeing of employees and the prospects of future generations, whilst still making money, improving profitability, funding innovation and achieving an increased market share.” Refinitiv’s implementation of sustainable finance offers the opportunity to resolve that tension and drive outcomes that are positive in both a sustainable and business sense.