A MORE DEMANDING APPROACH The level of analysis applied to ESG challenges is sophisticated and has become more professional over recent years. As a result, we are more demanding and more ambitious in our ESG approach and in the analyses we apply. This level of sophistication demands more data, more information and a higher quality of both. However, quality is improving in THIBAUD CLISSON response to the impetus provided by investors, non- Senior ESG Analyst governmental organisations and some regulators, which have introduced mandatory publication of these data. But data availability and quality are still less STANDARDISED than satisfactory, one of the biggest issues being a information are often absent, incomplete or simply DATA wrong. All of which makes analysis an imperfect science to the point where calculating impact can Key to measuring the impact of our investments MARKET STANDARDS There is an example that usefully illustrates these whose purpose is exclusively to provide funding for The ability to demonstrate impact is now a crucial green projects, relates to the publication of impact necessity for our industry. This ability is a very strong indicators. The indicator preferred by investors is that expectation expressed by our clients who want their relating to the volume of emissions prevented as a savings to facilitate meaningful outcomes. But it is result of the project. There is currently no market also a requirement for ourselves, as a responsible standard regarding how these prevented emissions asset manager that wants to go further than the ESG are calculated, with the result that each issuer is analysis that covers all management processes, to free to calculate these so-called ‘non-emissions’ as measure the impact of our investments as the basis they wish. Since the assumptions underlying this calculation have a colossal impact on the result, the impact is inherently indirect and occurs through the result itself is of very little relevance as things stand investments we make on behalf of our clients and currently. So a power generator and a supranational companies, nation states and/or projects, we are agency providing funding for the same project can dependent on the information available about these emissions prevented, simply because they do not use or negative. the same basis of calculation or comparison. With support from public policy and the voluntary commitments made by our own industry via coalitions and collective or individual engagement initiatives, the availability and quality of ESG data should rapidly improve and become standardised, as should the way in which impact is measured, both of which will lend greater credibility to responsible investment. 12