Moody’s has launched what it calls a “first-of-its-kind” tool for generating environmental, social and governance (ESG) scores for public and private small to medium-sized businesses (SMBs).
Per a Tuesday (July 13) press release, the financial services company said financial institutions (FIs) can complete portfolio and risk management by using critical quantitative data while helping companies track ESG risk across global supply chains.
SMBs “are the backbone of every economy; they drive innovation and power global supply chains,” Andrea Blackman, global head of Moody’s ESG Solutions, said in the news release.
Blackman also said that, along with using portfolio analysis and analyst-driven SMB assessments, “the ESG Score Predictor adds a unique, integral component to our comprehensive suite of cutting-edge solutions to help investors and companies leave no stone unturned when identifying and analyzing ESG risks and opportunities.”
According to Moody’s, per the release, determining a company’s exposure to ESG risk involves “comparable and standardized metrics.” Data quality and company coverage are routinely impacted by limitations in company disclosures, particularly in the SMB world.
“The ESG Score Predictor leverages state-of-the-art advanced analytics.” It then scores companies using their location, size and sector. Using Moody’s Orbis database, customers can see roughly 140 million company ESG scores. Or customers can use the ESG Score Predictor model along with their in-house data to score their portfolio.
This tool arrives at a time when SMBs are feeling pinched by supply chain delays and higher shipping rates, as PYMNTS reported earlier this week.
These businesses often don’t have the same resources as larger companies to absorb these costs and lack the leverage to negotiate for reduced prices.
It’s a situation that may not resolve itself anytime soon. Container ship operators say they saw retailers booking cargo space for the holidays beginning last month, three months earlier than the standard schedule.