Environment, Social and Governance (ESG) is more relevant than ever. ESG considerations are heavily driven by both investors and regulators. As a bank, broker, asset manager, or insurance company, you want to be able to screen your investments universe on ESG factors which are relevant to all your stakeholders. With these new requirements come a whole bunch of data challenges.
There are all kinds of data challenges you have to overcome before you can perform adequate ESG Screening.
Firstly, you need to define and create the universe of financial instruments to be screened on environmental, sustainability, and governance factors. This requires you to generate a unique, deduplicated, and regularly updated list of financial instruments. Secondly, you need to define your ESG Screening rules and ensure you have the right internal and/or external ESG data in place to active these business rules. It does not stop there, because you need to map your unique financial instrument list with the data being delivered internally or externally by data vendors such as Morningstar, Sustainalytics, or MSCI. Quite a challenge as it becomes a headache when data sets are not using the same formats or values amongst each other, or when your internal instrument identifiers differ from those of external data vendors. The next step is to perform the ESG Screening based on the data being delivered; the data quality needs to be in place and you want to automate the ESG Screening process to avoid error-prone manual processes. Finally, the results of your ESG Screening need to become available to all your stakeholders in a standardized format. Are you still with us?..
We help you to get rid of your manual procedures to include or exclude financial instruments based on ESG criteria. Within the BIQH ESG Market Data Platform, we make sure all relevant data for ESG Screening is collected, validated, and mapped against each other. After all ESG data is stored and linked together, we make sure your ESG Screening rules are applied to your investments universe. Business rules can be based on regulatory criteria such as SFDR classifications of funds and ETFs or on binary values (e.g. ‘yes’ or ‘no’), thresholds (e.g. % of revenue in a certain industry), controversies (e.g. countries on a sanction list), ESG ratings or your own ‘hard exclusion’ lists to name a few. The ESG Screening results will become available for you in whichever format you need. You can use it directly to limit the available investments universe for your downstream systems or you distribute the outcome of the BIQH ESG Screening engine. As a matter of fact, you can set up a screening process specifically for updating your hard exclusion list on a frequent basis as well. In the end, you profit from a fully automated, integrated and managed solution, without the nuisance of data management challenges. And mostly important, your end users are enabled to make sustainable decisions regarding their investments.
Future-proof ESG Screening is enabled by the BIQH Market Data Platform. Read more about our BIQH ESG Screening Solution and Market Data Platform here.