Project Summary

From 2026, around 150,000 companies globally need to report how the environmental, social and governance (ESG) factors materially affect their financial performance. There are no objective ways of choosing which ESG factors are important; the approach to financial materiality assessment of various ESG factors for a company is currently slow, expensive and subjective. Without an objective methodology to judge whether a company should be reporting about an ESG factor (climate change, say), it is difficult for a green investor to judge whether a company is investible or not. This, in turn, impedes effective capital allocation towards UK’s 2050 Net Zero commitments.

Previous collaborative research by Prof. Date and Dr Tucker, funded by UKFin+ AGILE stream, provides an objective and data-driven solution to this problem. Their work produces a ‘ranked list’ of the ESG drivers of financial materiality by linking the share price movements and open-source sentiment data. The proposed project aims to translate this research to market-ready prototypes. The project is piloting with leading global companies, leading auditors and one of the UK’s largest pension providers. The project will be hugely beneficial in achieving the UK Government’s ambition “for the UK to be a world leader for sustainable finance.”