Sustainalytics Launches ESG Signals

New Investment Support Tool Combines Big Data and Quantitative Modeling to Identify Portfolio Risk and Opportunity 

December 14, 2016, AmsterdamSustainalytics, a leading global provider of ESG and corporate governance research and ratings, today launched ESG Signals, an innovative quantitative tool that provides securities-level financial risk and opportunity signals based on environmental, social and governance (ESG), trading and financial data. ESG Signals analyzes thousands of correlations between variables over time and applies machine learning to extract meaningfully predictive risk/opportunity signals.

Sustainalytics developed ESG Signals in collaboration with Advestis, a FinTech company that specializes in machine learning and big data techniques for asset management firms. ESG Signals combines seven years of Sustainalytics’ ESG research on more than 1,600 companies with trading and financial data from Advestis to provide heads of research and portfolio managers with a portfolio monitoring, alerting and investment decision support tool.  In addition, asset managers and index providers can use ESG Signals to develop new products.

For every portfolio security, ESG Signals delivers either an opportunity, neutral or risk signal output. To test the findings, Sustainalytics and Advestis applied ESG Signals to a large cap, market weighted index. The index was adjusted to apply three ESG strategies: normative exclusion, best-in-class selection and a combination of the two. The reweighted indices outperformed the benchmark between 110 and 430 basis points annually, depending on the frequency of rebalancing adopted.

“For almost 25 years, Sustainalytics has been at the forefront of supporting ESG-related investment strategies,” said Sustainalytics’ President and Chief Operating Officer, Bob Mann. “ESG Signals further underscores our commitment to innovation by exploiting big data techniques, quantitative modeling and machine learning to examine the links between ESG and financial performance factors. Our goal is to help investment managers identify and leverage ESG indicators with the most meaningful predictive value.”

To date, ESG integration strategies have been largely qualitative in nature, primarily implemented as part of a qualitative process for risk mitigation.  As ESG factors become increasingly important considerations among mainstream investors, asset managers are looking for investment tools that have the ability to consistently and algorithmically analyze performance-based correlations to identify the most influent variables and in what circumstances they are most influent.

“ESG variables provide additional information not fully captured by today’s financial or trading variables,” said Advestis’ CEO Christoph Geissler. “Leveraging Sustainalytics’ high quality research and extensive ESG experience provides investors with a more comprehensive picture of a portfolio company’s risks and opportunities. We are glad to be partnering with  Sustainalytics to develop ESG Signals and applaud them for their commitment to product innovation.”

For more information on ESG Signals, please visit here.

 

About Sustainalytics

Sustainalytics is an independent ESG and corporate governance research, ratings and analysis firm supporting investors around the world with the development and implementation of responsible investment strategies. With 14 offices globally, Sustainalytics partners with institutional investors who integrate environmental, social and governance information and assessments into their investment processes. Today, the firm has more than 300 staff members, including 170 analysts with varied multidisciplinary expertise of more than 40 sectors. Through the IRRI survey, investors selected Sustainalytics as the best independent responsible investment research firm for three consecutive years, 2012 through 2014 and in 2015, Sustainalytics was named among the top three firms for both ESG and Corporate Governance research.  For more information, visit www.sustainalytics.com.

 

About Advestis

Advestis is a Paris-based FinTech that specializes in machine learning and big data techniques for asset management firms. Founded in 2011 by Christopher Geissler, Advestis employs four full-time professionals and is backed by three senior members of its Scientific Advisory board. Geissler is a financial data scientist with more than 30 years of experience in quantitative finance and machine learning. The firm invests more than 75 percent of its revenues in research and development, and has been awarded the ‘Innovating Fintech’ label by Finance Innovation for its work with Sustainalytics on ESG Signals. Advestis’ capital is owned primarily by the founder, members of its Scientific Board, and Quinten, a Paris-based data science company operating primarily in the healthcare and insurance sectors. For more information, visit www.advestis.com/en/.

Disclaimer

Nothing contained in this press release and tool shall be construed as to make a representation or warranty, express or implied, regarding the advisability to invest in or include companies in investable universes and/or portfolios. The performance represented is historical; past performance is not a reliable indicator of future results and results and the information provided in this press release and tool is not intended to be relied upon as, nor to be a substitute for specific professional advice and in particular financial advice. The information is provided “as is” and, therefore Sustainalytics assumes no responsibility for errors or omissions. Sustainalytics accepts no liability for damage arising from the use of press release, tool or information contained herein in any manner whatsoever.

Media Contacts:

Sarah Cohn
Director of Marketing
sarah.cohn@sustainalytics.com
+1 646.963.6944

 

Werner Schoeman
Marketing Manager
werner.schoeman@sustainalytics.com
+31 20 205 0048