Now bank customers can better see how investments perform on ESG

As the first in Denmark, several BEC banks are now introducing a so-called ESG score on investments in their online banks on mobile and computer. This will provide their customers with a tool so that they can better assess how their investments are performing in terms of environment, social conditions, and governance.

“Our digital solutions should help push the sustainable transition by providing bank customers with better opportunities to act sustainably. That is why we are now giving bank customers the opportunity to see what their concrete investments look like when compared to an internationally recognized rating,” says Lars Malmberg, deputy CEO of BEC Financial Technologies.

Customers of Nykredit, Arbejdernes Landsbank, Vestjysk Bank, Danske Andelskassers Bank, Møns Bank and Frørup Andelskasse can now see the new ESG rating in their online banks. Several other BEC banks will launch later in 2023.

“I am happy that, together with other banks in the BEC community, we can now launch a new function in our online bank that will make it easier for our customers to understand their investments from an ESG perspective. Hopefully, this can enable them to make investment decisions on a more informed base. We are constantly focusing on how we can make it more transparent, easy, and attractive for our customers to invest in green products and solutions,” says Tonny Thierry Andersen, Group CEO of Nykredit.

With the new solution, customers can see an ESG score directly in the online bank for each individual investment product they have invested in – shares, bonds, mutual funds, etc. Customers also receive ESG scores on their total investments and sub-portfolios.

The ESG score is created by the globally recognized MSCI ESG Rating, which internationally analyzes more than 8,500 companies and 680,000 investment products. The ESG score shows grades for both environment (e – environment), social conditions (s – social) and governance (g – governance) – as well as an overall score.

Fast IT development in a new collaboration model

“We have developed the solution in a new, agile collaboration model, where specialists from BEC and one of our member banks, in this case Nykredit, have collaborated outside our normal structures to bring this IT solution quickly to the market and make it available to all BEC banks,” says Lars Malmberg, BEC.

BEC is the largest of the Danish IT suppliers to Danish banks. Approximately 25 percent of Danish bank customers use a BEC bank as their primary bank.

“IT development in the financial sector sometimes takes a long time. That is why we are quite keen on exploring new forms of collaboration and partnerships where we either, as in this case, develop together with banks or other partners – or open our IT platform to new solutions from third parties,” says Lars Malmberg.

ESG insight for both advisers and bank customers

The new ESG score can be used both by bank customers in their online bank on mobile or computer – and by the banks’ investment advisers in their dialogue with customers, depending on how the individual banks choose to use the solution.

In addition to the banks that now display the new rating, several other BEC banks expect to add the ESG score to their online banks later in 2023, among others Merkur Andelskasse, Hvidbjerg Bank, Lollands Bank, Faster Andelskasse, GrønlandsBANKEN, Frøslev-Mollerup Sparekasse, PenSam Bank and Andelskassen Fælleskassen.

Facts about ESG ratings

Assessment and ESG figures are provided by the independent data provider MSCI, one of the leading data providers globally. They also stand behind, e.g., some of the most used global stock indices.

By comparing the MSCI ESG ratings, investors and stakeholders can gain an insight into how different companies perform in terms of sustainability metrics. A higher ESG rating indicates that a company performs better in these areas and includes sustainability in their business focus.

However, it is important to note that the MSCI ESG rating is particularly good at assessing a company’s resilience to sustainability risks. The rating is relative based on the company’s sector and therefore cannot be compared across industries.

The ESG key figures do not in themselves determine whether a company is sustainable, as they do not directly indicate the impact the company has on sustainability factors such as the global goals or the principle of doing no significant harm. The ESG score should therefore not be used as the only source for identifying sustainable investments.