ESG for
asset managers

Change how you ask for ESG data and you change the quality of the data received.

Whilst ESG has been mainstream for the last decade, investor appetite in the 2020s is taking greater account of sustainable value, with ESG being viewed as a key contributor to financial performance and long-term value.

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Thomas Russell
Published on Mar 16, 2020

For many, ESG offers the chance to raise the moral purpose of investing, to deliver the sustainable economic development of shareholders, stakeholders and the professional-network-linkedin.

For asset managers ESG provides a chance to reach new investors, to develop new revenue streams, to bid for institutional pools of money from charities and public sector pension funds. Then there are the many millennials who have just entered the workforce and are beginning to invest for the first time. ESG funds are a means to connect with this fast-growing market.

With these opportunities come unique challenges.

ESG ratings and benchmarks have experienced a rapid expansion, and with this an extraordinary degree of fragmentation. The World Business Council for Sustainable Development (WBCSD) reports that there are over 2,000 individual ESG reporting indicators requested by the approximately 600 ratings and benchmarks.

On top of the fragmentation issue there is the question of definition. Without a consistent definition of what ESG ratings are supposed to measure or even a consistent view of what constitutes a relevant ESG issue, it is difficult to gauge their effectiveness.

Asset managers may find themselves; managing the demands of investors for more frequent and granular ESG data; sifting through the overwhelming volume of ESG market data, metrics and risk profiles; and supporting (prospective) portfolio companies who often lack the resources and know-how to develop the right ESG risk profiles.

The cost burden is significant.

Some asset managers try to solve the problem by focusing on the outputs - reports, benchmarks and metrics. Our approach takes the focus upstream, to redefine the data flow, using our award-winning data tool Gather 360.

With Gather 360, the ESG analyst specifies the data that they need and their desired format, then submits data requests to data sources and providers, internal and external. Gather 360 enables the data-return to be tested against specification at source, identifying errors and anomalies for correction, so that the data delivered is statistically accurate and standardised. Gather 360 also automates the collection process, providing an audit trail against each line of data as well as certified provenance.

Gather 360’s proprietary approach has transformed how ESG data quality is managed and governed, saving days of analyst time checking and formatting data and slashing ESG data spend.

Gather 360 enables asset managers to;

  • Ensure that the ESG data shared with investors and the market is appropriate, statistically accurate and granular.
  • Create proprietary ESG reporting frameworks for portfolio companies, which in turn will improve company ESG market ratings and risk profiles.
  • Create proprietary ESG ratings indices.
  • Enhance their own ESG profiles to win more Institutional business.
  • Monetise their ESG data.

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