Experian launches ESG ratings tool

Experian has launched a new tool designed to provide lenders with an understanding of ESG risk factors within their SME portfolios.

ESG Insight delivers a tailored estimate of an SME’s GHG emissions split by scopes 1, 2, and 3, combined with a classification of its social impact and governance levels, sourced from Experian’s own dataset.

The range of factors are understood to include the number of employees at a site and the proportion of those that commute by car.

James McGarva, managing director of Experian Business Information, said: “SMEs are responsible for 34% of the UK’s total emissions, and yet current estimation processes fail to differentiate between, for example, a small independent bookshop versus a UK-wide frozen food retailer. This typically means over estimation for smaller businesses by an average of nearly 200%.

“ESG Insight provides a far more comprehensive view of emission estimates, together with social impact and governance ratings, so lenders can confidently baseline, report and target actions to manage the climate risk with any SME portfolio.”

The dataset covers the 4m UK SMEs.

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