Our ESG Engine software helps us to rank corporations and countries on ESG issues. Its capabilities further evolved during 2015, allowing us to analyze and monitor corporate ESG behavior in real time and the ESG analysis of funds.
We apply key performance indicators (KPIs) from external data providers and non-governmental organisations to assess ESG compliance, as defined by international guidelines or client requirements. These KPIs are cross-checked with ESG screening by global pension funds, financial institutions, and internal processes.
The ESG Engine applies simple exclusion screens as well as norm-based screenings, best-in-class techniques, and ESG overlays with specific theme or impact investments in mind. It integrates six leading ESG rating and intelligence agencies, namely Sustainalytics, MSCI, Ethix SRI Advisors, RepRisk, SIGWATCH and oekom research, as well as data from over 15 NGOs.
Combined, these provide 1,500 data points across 10,000 companies. This is valuable intelligence in offering a “360 degree view” and enables us to provide optimum objectivity and reliability. It also means that we can develop ESG products tailored to individual institutional investors.
Through a systematic screening and scoring process, the ESG Engine has been used to create a wide range of bespoke investment products. This includes the CROCI World ESG strategy, which brings together equity valuation and investable strategies from CROCI and responsible investing from the ESG Engine. In addition, screens for corporate fixed income, sovereign emerging markets and corporate equity and fixed income have been launched among others. To date, the ESG Engine & Solutions Team has focused predominantly on bespoke client requests.
The features of the ESG Engine are now available on demand for our investment professionals. Going forward, we aim to roll out this tool across our investment platform.