Proxy advisory firm Glass Lewis has launched the first stage of a new line of business designed to take the company “well beyond [its] core proxy research and voting business”.
The Climate Intelligence service is designed to provide information on the climate strategies of more than 4,000 companies and to assess the quality and effectiveness of these strategies.
According to Diederik Timmer, president, Europe at Glass Lewis, (pictured) the launch is a response to client demand for stewardship services such as voting advice, research and sustainability metrics, to be provided by one source.
Timmer also said that the new service differs from traditional climate data offerings that rely on backward-looking indicators such as emissions data, net-zero alignment and scenario modelling which provide limited visibility into how companies are performing through their respective transitions.
Instead, said Timmer, it will focus on financial materiality and how well companies have executed their respective strategies for creating and protecting shareholder value in a low-carbon economy.
“Our approach focuses on the real economic impact of transition: how strategic choices, capital allocation, and execution shape a company’s future performance.”
For example, has the company committed enough resources to follow through on their strategy. “It is designed to discover any discrepancy between what they say they are doing and what they are actually doing,” he said.
The information should be used as a basis for further exploration or as a starting point for engagement, said Timmer.
The Climate Intelligence service will also be Glass Lewis’s first AI-powered offering and will serve as the blueprint for future offerings, according to Timmer. “It is a human-centric approach that uses AI but it is the analysts who are the pilots in the cockpit.”
The product release comes at a challenging time for proxy advisers in the US. In December, the US president issued an executive order designed to scrutinise the role that proxy advisers play in the voting process.
At the same time, JP Morgan Asset Management announced it would no longer use third-party proxy voting advisers and would instead rely on its own internally-developed AI platform.
Unsurprisingly, the proxy advisers have hit back at the criticism, stating that the majority of their clients ultimately have their own customised voting policies. Proxy advisers have also stated that they will move away from issuing single voting positions on proxy issues and instead offer multiple perspectives to clients.
Now it appears that the advisory firms are also looking to expand their offerings as well as their perspectives
Indeed, Glass Lewis has described its recent product announcement as a “major step” in its transformation into a “tech-enabled data firm” that is “well beyond our core proxy research and voting business”.
It is also notable that the Climate Intelligence services is available in the UK, Europe, Canada and Australia but not the US where sustainable investment has been a more controversial issue.
