Risk Insights and Instinctif Partners Africa Announce ESG Coalition

Risk Insights and ESG business communications firm, Instinctif Partners Africa are pleased to announce they have entered into a strategic partnership. Risk Insights is a well established data analytics company and has developed South Africa’s first machine learning ESG Sustainability Rating model – the ESG GPS addressing specific requirements for Africa. The venture combines Risk Insights’ strong ESG data analytics capabilities and expertise with Instinctif Partners’ world-class, strategy-led, communication approach focussing on building reputation, combatting risk and delivering impact and value.

Deanne Chatterton, CEO of Instinctif Partners Africa says, “In today’s rapidly changing business environment, ESG and how a company mitigates for climate change impacts, plays a critical role in business’ ability to deliver a compelling and successful sustainability proposition. There is a growing business imperative to align corporate responsibility and commercial performance, with investment decisions, board appointments and remuneration policies increasingly, coming under scrutiny from stakeholder groups including investors and shareholders, employees and suppliers. Companies are recognising the need to understand their ESG exposure in order to remain sustainably competitive and mitigate emerging risks.”

Risk Insights ESG GPS is a rating tool that uses big data, AI and machine learning algorithms to transform publicly available information and disclosure reporting, including integrated reports and financial statements, regulatory frameworks, the laws of the land, published media and social media coverage, into ratings for environmental, social and governance metrics of all JSE listed companies. Together, Risk Insights and Instinctif Partners Africa offer deep insight into ESG risk mitigation, what is driving core sectors, and how to develop and execute a value-driven communication and reputation strategy that is purpose-built to support a company’s longer-term commitment to ESG and value creation.

Anashrin Pillay, acting CEO of Risk Insights and Executive for ESG, says, “We believe our partnership provides clients with a powerful and compelling ESG shared value proposition. Risk Insights has used its proprietary ESG GPS to rate all listed companies on the Johannesburg Stock Exchange, and we have also commenced with the rating process for all companies listed on the Nigerian, Kenyan and Mauritian exchanges respectively, with a strategic plan to finalise these exchanges in the next 6 months. At Risk Insights, we benchmark our ESG ratings against international best practice and integrate critical insights and contextual data to determine the sustainability of a company, which we believe is a significant competitive advantage.”

Our approach is informed by today’s evolving environment which increasingly requires a more holistic approach to evaluating an organisation’s ESG score/ rating and sustainability. While some ESG rating models may have worked when the world used to be purely disclosures focused, this new normal – and its increasingly activist stakeholder environment – requires a far more stringent and robust approach from companies.”

Instinctif Partners Africa works with the ESG GPS data to inform its integrated approach to Reinventing Responsibility for clients through strategic ESG communications. The Instinctif Partners ESG practice focuses on assisting organisations in three key areas:

1. Creating sustainability strategies – using insight, peer benchmarking and risk management to ensure a business strategy is sustainable,

2. Engaging for systems change – influencing policy, regulatory, investor, cultural and consumer thinking and listening to the evolving demands of the organisation’s stakeholders,

3. Communicating with impact – helping share business data and tell the company’s stories appropriately and effectively to enhance reputation, access new and existing resources, build closer working relationships with partners, sell more products and services and crucially, retain ongoing social licence to operate.

The focus on ESG as a critical business imperative, rather than the public relations exercise of the past, is fast gaining momentum. Not only has the World Economic Forum (WEF) been actively engaging with corporates worldwide to increase the commitment to ESG and set some clear targets, but the investor community and some corporates are starting to take a harder stance too.

BlackRock has already outlined bold requirements for its investee companies and in the past week, Swedish activist investor, Cevian Capital, has asked its portfolio companies to develop proposals to incorporate ESG targets into executive incentive plans in time for their annual general meetings in 2022. Half of FTSE 100 companies link executive pay to ESG targets, and recently, both Nike and Chipotle have announced new sets of environmental and social goals – and systems through which their executives’ compensation will be tied to achieving them.

Risk Insights has a team of dedicated data scientists who utilise deeper insights from client-owned data to model which ESG elements will secure most returns for their business – and positive impact for their stakeholders.
“This partnership has come at a critical juncture in the evolution of our business; in February 2021 we launched our global ESG offering, which we have called Reinventing Responsibility. Aligning with Risk Insights provides us with the data to clearly identify client ESG risk factors and work with those client teams to close the gaps and develop strategies to inform meaningful changes in their approaches.

This is a game changer for effective corporate ESG strategies, ensuring they can be used to attract larger pools of capital, deploy investment where it will have the most social impact, and more effectively position businesses as purpose-driven brands,” says Deanne Chatterton.

Through their partnership Risk Insights and Instinctif have already developed and released a banking sector ESG ranking that saw Nedbank take poll position for 2019, and a mining sector ESG ranking in which the gold miners proved to be ahead of their resources peers for 2019.

Pillay concludes, “ESG is no longer just a buzzword, and this partnership between Risk Insights and Instinctif is an endorsement of the power that ESG ratings can provide in identifying and mitigating ESG risk and attracting capital. We believe it is a critical platform for long term sustainability across economies globally.

The negative impacts on companies that have no, or low, ESG disclosure is becoming more apparent to stakeholders, with their sustainability coming into question. With our combined offering we can deliver an independent view of how a company rates in terms of sustainability, while also ensuring access to dedicated world class ESG consulting services that help companies change the narrative around their ESG journey by better understanding what to do and how to communicate it. ESG GPS ratings navigate a path to sustainable value creation.”