How ESG Reporting Modelling Supports Wealth Managers & Investors


What is ESG reporting modelling?

Environmental, Social and Governance (ESG) reporting is a difficult yet essential aspect of the investment process. Accurate reporting allows an investor or wealth asset manager to see the detailed analysis of the investment portfolio and ESG portfolio ratings. This enables them in monitoring the ESG impact of investments and working towards a sustainable investment strategy.

The Importance for Wealth Managers and Investors

Information about an investment’s environmental, social and governance activities (spanning everything from carbon emissions and carbon footprint to workforce diversity and equality practices) can inform an ESG rating and ultimately be incorporated into the ESG report. Whether it’s an individual investor who has a passion for supporting green energy projects or a wealth manager hoping to increase the ESG rating of their client’s portfolio, ESG reports are therefore invaluable in facilitating informed investment decisions. 

Accurate ESG reporting also helps wealth managers abide by sustainability rules and regulations. MiFiD II requires wealth managers to incorporate the sustainability preferences of their clients into investment decisions – it is therefore vital for wealth managers to have up-to-date and accurate ESG reports that display they have complied with this requirement. ESG reporting will therefore allow wealth managers to build a portfolio that accurately represents and incorporates their clients’ ESG preferences. Individual investors will be looking to see if an investment’s activities align with their beliefs.

A Solution

Finding a software solution that can produce both ESG ratings and reports can simplify the entire process for wealth managers and investors. FSL’s data-agnostic ETHiX software helps wealth managers to provide an independent ESG rating for their clients’ individual investments or entire portfolio. Additionally, ETHiX possesses a ‘what-if function’, where wealth managers can see how the ESG rating of their client’s portfolio changes following the disposal or acquisition of holdings. Finally, alongside allowing customisation of a client’s portfolio to reflect their ESG priorities, ETHiX also produces a comprehensive ESG report, supporting wealth managers to comply with sustainability regulations. To learn more about ETHiX or to request a demo, click here.