ESG Book, a company that has created a platform to collate corporate environmental, social and governance (ESG) data, has closed a $35m (£28.54m) funding round.
The company’s cloud-based platform aims to make ESG data accessible for investors, fund managers and financial institutions.
ESG Book will use the proceeds of the Series B round to expand its services globally in a bid to capture a slice of an ESG data market valued at $5bn.
The round was led by US strategic investment firm Energy Impact Partners alongside Paris-based investor Meridiam and Munich-based Allianz X.
ESG Book was incubated as a subsidiary out of Arabesque, a group of financial technology companies, in 2018.
Previously known as Arabesque S-Ray, ESG book is headquartered in London but has offices in Frankfurt, Boston, Singapore, Delhi and Tokyo.
It launched the platform in 2021 and has since secured deals with financial organisations, such as investment bank Citi to create an equity benchmark index based on ESG scores.
It’s also developing tools for Dow Jones, including ESG sentiment scores for portfolio managers.
According to ESG Book’s pitch deck, the company covers more than 25,000 companies, analysing 450 ESG data points per firm.
“Investors, companies, and all market participants are today demanding better, technology-enabled solutions in order to direct capital towards more sustainable and higher impact assets,” said Dr Daniel Klier, CEO of ESG Book and former global head of sustainability at multinational bank HSBC.
“ESG Book is disrupting how sustainability is integrated and measured on a global scale by using next-generation technology that makes ESG data accessible, comparable and transparent.”
ESG has become a buzzword in boardrooms but is increasingly shaping investor decisions.
However, there are often disparities in the way companies report ESG metrics, making it difficult for stakeholders to make clear assessments and comparisons.
Its platform is also used for due diligence – a feature that may be useful for investors who are becoming more cautious with their capital amid rising interest rates and market uncertainty.
Carsten Middendorf, head of platforms and acquisitions at Allianz X, said: “As an investor, we know how important data is for making decisions. Sustainability isn’t just a fad or a phase. It’s our necessary present if we are to have a future. That’s why it’s so important to ensure transparency, quality, and comparability in ESG data.”