Très heureux d’annoncer la publication du document de travail ESG Tech: Attractions and Challenges for Fintechs in the Age of Covid-19 rédigé avec Étienne Gendron, Manuel Morales et Dominique Payette. Le document de travail a été produit grâce au soutien de la Chaire Fintech AMF-Finance Montréal qui l’a ajouté à ses cahiers de recherche (ici).
Voici le résumé de notre texte.
Responsible Investment (RI), which refers to the consideration of environmental, social and governance (ESG) factors in investment decisions, has taken off in the last decade in Canada and in the rest of the world. However, RI faces a major challenge that flows from the diversity of transparency regimes and reference frameworks governing the disclosure of ESG information. In particular, the deficiencies of disclosure regimes regarding environmental information have been criticized namely with respect to data concerning climate change. More recently, the Covid-19 crisis has spurred similar critiques for social information disclosure.
The absence of coherent reference frameworks is problematic for both investors and companies problematic for both investors and publicly-listed companies. For companies, this results in compliance costs as they have to disclose information against various frames of reference. For investors, the costs of analysis are significant, exacerbated by the difficulties in comparing companies.
Against this backdrop, this paper explores the contribution that fintechs can make in supporting investors and asset managers with respect to their collection and use of ESG data, focusing on the opportunities that offer advances in artificial intelligence and machine learning. In addition to exploring opportunities, our paper discusses the issues raised by the involvement of fintechs with respect to ESG data. As ESG information providers, fintechs have the potential to influence asset allocation by investors and portfolio managers. This, in turn, affects issuing companies through the price mechanism as they are rewarded or punished for their ESG track-record through the cost of capital. Ultimately, this can have concrete consequences for firms’ stakeholders. Hence the need to ensure the accountability of fintechs in this area, amongst others.Rousseau, Gendron, Morales et Payette