![]() ![]() Third-party organizations don’t always update ratings in a timely way after a significant ESG event either, making them less useful during a crisis. Third-party reports may not reflect, for example, that a company working to improve its questionable ESG performance may be more valuable than one resting on its laurels. While third-party reports provide a helpful starting point for further analysis and an independent perspective, they often require additional context. For example, we provide a comprehensive list of questions to consider when assessing a company’s practices and a template for the analyst to record their ESG perspective on the company.įinally, the tool features an engagement tracker that allows our teams to record the focus and outcome of their discussions with corporate executives and outside groups-information outside investors can’t get anywhere else. Second, ESIGHT hosts the equities team’s standard framework on evaluating ESG practices and translating those practices into action. Teams can also filter by company, taking in all the available information on a single company at a glance. The feeds would be familiar to Facebook, Twitter or Instagram users-investment professionals can even “like” or comment on other posts. On their home screens, investment team members see reverse chronological posts of information and insights from our equities and fixed-income analysts, as well as separate feeds for recent ESG ratings and reports from third-party providers MSCI and Sustainalytics. The platform has three main functions, starting with aggregating information. ESIGHT is a one-stop online shop where all AB investment teams can access and add proprietary information about corporate ESG practices. Our equities team has applied the same principles, along with some of the discussion-promoting features of Facebook, to create ESIGHT. Finding a restaurant that has great service and great sushi in an unfamiliar city used to require a lot of spade work, but now requires only a quick scroll and a few clicks. ESIGHT: Adapting the Best of Web 2.0įilling everyday information gaps have made review websites like Yelp ubiquitous. A forum for sharing both proprietary insights and aggregating third-party views on ESG can help fill the information gap. Yet, firms don’t have to provide investors with a detailed, regular accounting of, say, their carbon emissions in the same way they must report quarterly earnings results. Corporate environmental, social and governance (ESG) practices fit the bill, as they are critical to both long-term and short-term performance in any strategy that invests in private sector stocks or bonds.Ĭompanies that treat workers and customers poorly, neglect their impact on the environment and fail to properly oversee their own operations may be more at risk from scandals that destroy their brand’s reputation or cripple operations. It’s important for asset managers to prioritize sharing the information that stands to benefit the largest number of investors. Digitalizing information sets the stage for future innovation, including the application of machine-learning technologies.When information is widely shared, however, clients in a broader span of investment strategies stand to benefit. It used to be that only clients in a particular strategy would benefit from the proprietary information or insights of any given PM or analyst.It creates a “hive mind.” Each portfolio manager (PM) and analyst calls on different knowledge and experience when assessing new information, which can lead to more insights-or at least inspire provocative questions.That’s changing, however, as new digital platforms make it easier for money managers to share real-time information with colleagues across asset classes and strategies.īetter, faster information-sharing has three major potential benefits for clients: ![]() ![]() The digital age gave professional investors near-instantaneous access to a vast trove of data, but organizational silos have sometimes prevented subsequent insights from spreading widely. ![]()
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