alva assigns ESG scores to banks based on alternative data including media, regulator, investor, government, NGO content. Fifth Third Bank holds sector lead with +58 ESG score in the 20-company index.
NEW YORK, February 3, 2021 (Newswire.com) – alva, the Stakeholder Intelligence company, has revealed the leaders in a new quarterly index of the top performing U.S. banks, based on perceptions of their ESG (Environmental, Social and Governance) profiles.
alva’s U.S. Banking ESG Report assigns ESG scores to banks based on publicly available content including print, online, broadcast and social media, as well as regulator, investor, government, NGO data. It reveals that the ESG performance of different banks varied hugely in Q4 2020, with Fifth Third Bank leading the index with a score of +58.
Fifth Third Bank’s score was driven by its efforts regarding financial inclusion and capacity building, and through the incorporation of ESG factors in its credit analysis.
Key Fifth Third initiatives include the launch of the Greater Cincinnati COVID-19 Small Business Response and Recovery Initiative, the beginnings of a strategic relationship with Health iPASS and the bank being included in the fourth annual Diversity Best Practices Inclusion Index.
Other strong ESG performers in Q4 included TD Bank, Ally Financial, JPMorgan Chase and BofA, with all of these banks seeing materially positive impacts from their community grants, work in marginalized communities and small business recovery efforts. TD Bank’s ESG score was also boosted as it was named in the Dow Jones Sustainability World Index for the seventh consecutive year.
The sector’s business ethics had the highest visibility and negative material impact score of any issue, with a negative material impact of -32%.
The launch of alva’s US Banking ESG Report follows the launch of alva’s ESG Intelligence solution last October, providing unparalleled insights for companies grappling with the new post-COVID dynamics of Stakeholder Capitalism.
According to Larry Fink’s Annual CEO letter, over the course of 2020, companies with better ESG profiles have outperformed their peers. During 2020, 81% of a globally representative selection of sustainable indices outperformed their parent benchmarks.
By proactively monitoring their ESG profile, companies can quickly identify emerging risks before they become material, while also capitalizing on their own positions around specific issues in which they may be seen to be a leader.
Through the daily analysis of millions of pieces of print, online, broadcast and social media content – including regulatory disclosures and NGO communications – using the market-leading alva ESG score™, alva provides real-time benchmarking of over 2,000 companies’ ESG scores, all indexed against the Sustainability Accounting Standards Board (SASB) reporting framework.
Alberto Lopez Valenzuela, Founder and CEO, alva, said:
“The journey to become more purposeful and stakeholder-centric businesses started a while ago, but recent events such as the pandemic, climate change and racial injustice have accelerated the adoption of Stakeholder Capitalism and ESG business practices.
“We are putting to use our 10-year experience analyzing alternative data to help asset managers, public companies and advisors obtain a robust, transparent and comprehensive approach to measuring and reporting on ESG issues.
“Our intelligence reveals that business ethics breaches continue to have a long-lasting negative material impact which overshadows the banking sector’s ESG profile. However, banks’ efforts to support disadvantaged communities, to increase financial inclusion and reduce climate impacts are starting to shift perceptions.”