Best AI/Machine Learning Data Initiative: Truvalue Labs

The winner of the award for Best AI/Machine Learning Data Initiative has positioned itself at the epicenter of a major trend shaping the investment management industry: the rise in environmental, social and governance (ESG) integration. 

Truvalue Labs specializes in applying artificial intelligence (AI) to uncover timely, material ESG information, and deliver analytics to investment managers seeking to quantify intangible factors that drive a company’s value and performance. As the judges noted, “At a time when investors are demanding more socially conscious investments, Truvalue Labs brings a worthy application of AI for the purpose of advancing the cause of ESG investing.”

The company was founded in 2013 with a mission to solve issues that investors and analysts had been facing with traditional sources of ESG data such as biased company reporting, non-material information and ‘greenwashing’. 

“A lot of ESG data is created based on company self-reported information,” says Hendrik Bartel, CEO and co‑founder of Truvalue Labs. “A company can put out any kind of information it deems to be ESG or sustainable to investors and ratings companies, and analysts who follow a specific methodology will derive insights out of that. We founded Truvalue Labs to use modern-day computing technologies to parse through massive amounts of unstructured data to create an ‘outside look in’ to companies.”

By deploying machine learning and natural language processing technology, Truvalue Labs captures and analyzes news and information on more than 9,000 companies from over 100,000 non-company sources and millions of data points to compile an independent perspective of company ESG performance. Sources include industry-specific publications, regional and international news reports, government agency studies and reports from watchdog groups and non-governmental organizations.

Through Truvalue Platform, Truvalue Data and Truvalue Cloud, the company delivers objective measures, scores and insights by revealing value and risk factors that help investment managers evaluate companies, fulfill fiduciary duties and uncover new sources of alpha. The proof is in the numbers—an independent Harvard Business School study published in October 2018 found significant positive alpha of 4–5% annually could be unlocked by using a combination of Truvalue Labs’ big data and traditional ESG ratings from MSCI.

Over the past year, the company has expanded its offering and has partnered with German index-engineering company Solactive to launch ESG index products. Looking ahead, Bartel says the company plans to expand its coverage into the fixed-income space and increase its language intake from seven—English, Portuguese, French, Italian, German, Spanish and Japanese—to 13, to include Nordic languages, Mandarin and Dutch.  

Read more about the Inside Market Data & Inside Reference Data Awards 2019 winners