Laurie Clark is a Bay Street veteran who’s turned her attention to environmental, social and governance disclosure, an arena for some of the world’s largest companies and consultancies. But her focus is the needs of smaller organizations.
Ms. Clark’s experience is in designing trading systems, a skill set that went into the technology of her venture, Onyen Corp., which launched in February. Ms. Clark stresses the startup is true to the ESG mission – especially the S and G – with women in key roles.
Onyen’s target market is made up of small and mid-size resource companies that must up their ESG disclosure game, but don’t have the deep pockets to hire departments of sustainability experts or want to avoid shelling out the $50,000-plus it can cost to bring in consultants to design a program.
“These companies are always in search of alternative sources of capital. They have to disclose their ESG performance. That’s the main goal for all of these public issuers. And it is their lifeblood,” Ms. Clark said. “If they cannot access capital, they may as well close. So, it’s vital that they have an easy platform with which to do this reporting.”
It’s clear the financial burden is heavier on smaller players than large ones. Onyen’s software allows companies to fill in answers to numerous pointed questions about such things as responsibilities of the board of directors, climate risk and work-force diversity and inclusion, and it generates ESG reports in nearly two dozen accepted formats. It works in similar fashion to tax software, allocating data automatically.
ESG metrics are approaching financials in importance for attracting investors. Indeed, over the past year institutions such as pensions and investment funds have made a lot of noise demanding companies offer details of their strengths on the sustainability front, as well as strategies for fixing weaknesses.
But issuers face the prospect of navigating myriad reporting standards, such as those established by the Task Force on Climate-Related Financial Disclosures, Sustainability Accounting Standards Board, Global Reporting Initiative and Principles for Responsible Investment.
Investors and rating agencies, such as the Bloomberg ESG Data Service, MSCI ESG Research and Dow Jones Sustainability Index, employ web-crawling software to scour corporate reports and assign scores based on what’s included in the disclosure. Onyen’s software is designed to present findings in ways that the ratings firms’ software picks them it up.
Regulators are moving toward mandating ESG disclosure, but have been wary of imposing costs on small businesses. This was not lost on an Ontario task force charged with modernizing Canadian securities regulation. In its January report, it said companies should be mandated to adopt the most stringent standard for disclosing climate-related risk – but those with a market capitalization under $150-million should be given five years to do it, compared with two years for the biggest issuers.
Ms. Clark uses the example of a junior miner run by a handful of geologists and engineers exploring around the world. “How can you possibly say, ‘Okay, I’m gonna take a geologist and I’m going to refocus that person to ESG. Can you write a report now?’ ” she said. “It’s going to be at least a year of their time and effort to figure out what the standards are, figure out which way they’re supposed to align themselves and then which questions they are supposed to actually answer.”
Onyen is in a world of giants that provide similar products, including Refintiv, which this year became part of London Stock Exchange Group, and Sustainalytics, a unit of Morningstar. There are also other Canadian providers of ESG reporting technology, such as Manifest Climate, which focuses on climate-related disclosure and risk analysis.
Onyen’s launch comes at a time when Canadian tech is attracting major investments from international funds and through initial public offerings. Currently, the firm’s main investors are American, British and Australian, and Ms. Clark said she has not yet planned its next funding round.
Twice named to Canada’s 100 Most Powerful Women list, she was an executive and shareholder of Dataphile Corp., a financial tech company sold in 2003. Ms. Clark is also the founder of Smarten Up Institute, which provides courses to financial professionals, and Canchek Corp., an anti-money-laundering technology company.
Among her colleagues at Onyen are Ani Markova, a long-time portfolio manager who is in charge of business development, and adviser Ingrid Hibbard, chief executive of Pelangio Exploration Inc. David Drozda is chief technology officer and Mark Thorpe is vice-president of product.
Ms. Clark is adamant that women provide important perspectives in the ESG world, and that has helped the company gain traction early in its development.
“When you’re talking about societal change, when you’re talking about environmental impacts, we’re having babies. We want to make sure that our babies are growing up in a world that is going to be okay. That is a really important element of all of this. And so it is visceral,” she said. “We feel it, we own it, we understand it. This is not a negative statement to men. I’m just saying that women bring an alternative point of view to the table.”
Jeffrey Jones writes about sustainable finance and the ESG sector for The Globe and Mail. E-mail him at firstname.lastname@example.org.
Keep your Opinions sharp and informed. Get the Opinion newsletter. Sign up today.