Sustainability data and technology provider ESG Book and non-profit foundation the Future Investment Initiative (FII) Institute announced the launch of the Inclusive ESG Tool and Inclusive ESG Score, a new set of solutions aimed at improving ESG data quality and facilitating sustainable investment capital flows for emerging markets (EM) companies.

According to the organizations, the new solutions aim to help address a multi-trillion dollar ESG investment gap, with emerging markets receiving less than 10% of ESG capital flows, despite accounting for over half of global GDP. FII Institute said that investors have indicated that ESG ratings agencies are a key barrier to investment flows in emerging markets, with the use of KPIs that are not relevant to EMs as one of the core challenges.

FII Institute CEO Richard Attias said:

“Our global financial markets are more interconnected and driven by change than ever before. Investing in ESG (Environmental, Social, and Governance) initiatives plays a pivotal role in the solution. These funds should be strategically directed toward emerging markets where their impact is most needed, all while ensuring the returns necessary for the vitality of these markets.”

The new toolkit’s primary analytic is the Inclusive Momentum Score, which aims to indicate future ESG performance, integrating current and ongoing change in companies’ sustainability performance. The momentum score combines with a current ESG Performance Score and Disclosure Score to provide a comprehensive assessment of corporate sustainability performance.

The organizations also announced the launch of a Top 250 Inclusive ESG Ranking based on the new score, aimed at identifying the most sustainable emerging markets companies.

ESG Book CEO Dr Daniel Klier said:

“We are delighted to be collaborating with FII Institute to usher in a new approach to ESG data in emerging markets. The Inclusive ESG Score is a next generation tool for investors that identifies the sustainability leaders of today and tomorrow, with a transparent, data-driven approach that is tailored to emerging markets. Through this partnership, we look forward to providing a solution that enhances investment decision-making, and in turn helps to drive greater ESG investment flows to emerging market companies.”