IMD & IRD Awards 2022: Best ESG data provider—FactSet

OVERVIEW

Environmental, social and governance (ESG) data has transitioned from a fringe dataset to a wholly adopted component of the investment lifecycle faster than any other type of data. To truly evaluate a company and eliminate ESG “blind spots,” a comprehensive approach embodied by FactSet’s data is required.

THE SOLUTION

FactSet’s ESG data offering incorporates company-reported ESG metrics, firmographics and external stakeholder information. In late 2020, it acquired Truvalue Labs to augment its existing ESG offering and has since worked to integrate Truvalue data throughout its Workstation. Truvalue’s algorithms sift through millions of data points, helping users uncover ESG intelligence hidden in unstructured, third-party data from over 100,000 sources (e.g., articles, social media and filings) in 13 languages. The results provide actionable information on how companies are complying with the Sustainability Accounting Standards Board (SASB) and UN Sustainable Development Goals (SDG) frameworks, and how they are behaving pertaining to issues like carbon emissions, labor relations and data security. 

Truvalue’s SASB Scores provide short-term, long-term and momentum scores for 26 ESG categories. The firm also provides dynamic materiality scores that help identify the most financially material ESG categories for a company.

WHAT’S TO COME

FactSet will remain focused on addressing the ESG data challenges facing its clients by: 

• Providing timely and transparent data that has been objectively rated by algorithms
• Capturing external, non-biased views on company performance—e.g., from reporters, analysts, advocacy groups and government regulators 
• Focusing on positive ESG behavior as well as controversies, uncovering opportunities in unstructured data, and offering investors a full view of the companies they are monitoring

WHY THEY WON

FactSet walked away from this year’s IMD and IRD awards with arguably the two most topical data categories on offer: ESG and alternative data. The Norwalk, Conn.-based data specialist stresses that not all ESG data is created equal, a facet it focuses on as a means of competitive differentiation. The firm’s acquisition of Truvalue Labs, announced in late 2020, is critical in this respect, sifting through millions of data points and helping users to identify ESG “intelligence” within unstructured, third-party data from more than 100,000 sources. Add to that the firm’s army of data domain specialists and its reputation, and you have a highly compelling proposition.