Phil Kim, senior vice president, global head of ESG product, State Street, says a robust technology platform helps asset managers.
As part of its coverage of Sibos 2022 in Amsterdam, Funds Europe has reached out to financial experts on key topics at the conference. Read more analysis here.
Asset managers looking to make or offer investments that are ESG-friendly often identify data transparency and availability as significant challenges. What can be done to overcome this?
“Today, no individual ESG solution can provide a single source of truth. Integrating data from multiple vendors that may have strengths in each category (E, S and/or G), as well as varying coverage, can help fill gaps. A robust technology platform that integrates multiple ESG data sets into a centralized repository and ecosystem is an essential component, particularly under existing and looming regulatory requirements.
“In order to process all of this incoming data, asset managers need to leverage a robust technology platform that can integrate multiple disparate market data sources into one central, harmonizing internal ecosystem. This environment would allow asset managers to seamlessly pull and map data to identify potential outliers and discrepancies and highlight where more in-depth analysis is needed.
“Transparency is a key issue when understanding ESG scores or ratings based on proprietary methodologies. As ratings tend to exhibit the most divergence among different data providers, firms are now gravitating toward deriving their own ‘house view’, leveraging underlying ESG metric-level data”.
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