CLEAR Info: Investment strategies incorporating environmental operational risk appraisal data

CLEAR Info: Investment strategies incorporating environmental operational risk appraisal data

CLEAR Info is a project that aims to demonstrate a system for integrating company and site level environmental data into decision making. Part of this involves using operational risk appraisal (Opra) scores that are produced annually by the Environment Agency (EA) for companies that it regulates and provides permits.

One project aim is to show that investors can identify stocks that better manage their environmental risks and that those companies offer higher returns for lower risk. In particular, Opra data provides insight into resource efficiency, non-compliance and management performance. This report discusses three approaches to analysing investor’s environmental risk: sector profiling, engagement and enhanced indexing.

The CLEAR Info project is ongoing and will proceed to demonstrate environmental data integration into investment strategies. Investors can already access Opra data to build sector profiles, engage companies with UK sites and inform stock selection. In 2014, the project intends to backtest an enhanced UK small cap index for benchmark tracking and outperformance, deliver training workshops for environmental integrations, share best practice with EU regulators and explore new ways to share data with investors and companies.

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