LSEG Acquires Beyond Ratings to Integrate ESG Into Fixed Income

Beyond Ratings will sit within LSEG’s Information Services Division (ISD), which also includes FTSE Russell, and will operate as a contained business within the ISD.

London Stock Exchange Group (LSEG) has acquired Beyond Ratings, a provider of smart data and analytics that integrates Environmental, Social and Governance (ESG) into fixed income.

Beyond Ratings’ innovative research and sustainable investment (SI) expertise addresses LSEG’s client demand for research-driven cross-asset solutions to integrate sustainability considerations into investment strategies, risk management, and stewardship approaches continues to grow. The deal aims to deliver just that: additional choice, greater innovation and added value for LSEG’s clients.

By combining Beyond Ratings and FTSE Russell capabilities, and incorporating the latter’s leading global equity SI solutions, LSEG will be able to enhance its leading fixed income sustainable investment data set and analytics and offer a new sustainable fixed income index offering, based on established benchmarks that are trusted and widely-followed by the investment community.

Beyond Ratings will bring a deeper set of sustainability data, smart risk and climate metrics, as well the underlying models, thus broadening the choice of ESG integration solutions across both equity and fixed income.

Last year, LSEG partnered with Japan Exchange Group (JPX) to identify and collaborate on financial market infrastructure initiatives designed to promote global sustainable investment and on product marketing initiatives. They first focused on joint marketing activities to promote listing products, especially those related to ESG.

The World Federation of Exchange is highly supportive of ESG measures, having created a Sustainability Working Group (SWG) in 2014. Since that time, the group has produced a number of market-leading research reports on the topic of sustainable finance including the annual WFE sustainability survey.

“Sustainability is one of the WFE’s business strategy pillars for 2019, and has formed a key part of our mandate since 2014, therefore we are delighted to see the issue move up the agenda for standard-setting bodies such as IOSCO”, Nandini Sukumar, Chief Executive Officer at WFE, said recently. “Only by acknowledging the relevance and importance of ESG issues for financial markets and financial market regulators, and then working in partnership to tackle those issues, can we hope to move towards a truly sustainable financial future.”