The provider of factor-based portfolio and market analytical tools for investment professionals has launched a new ESG factor simulation tool to help clients optimize the impact of ESG within their portfolios in collaboration with Sustainalytics, a global leader in ESG research, ratings and analysis.
Style Analytics’ aims to help institutional investors and investment managers determine which factor exposures impact portfolio risk and performance. The firm supports portfolio ESG guideline monitoring, portfolio-level ESG risk analysis, quick identification of portfolio investments in sustainable and ‘red-flag’ securities along with new ESG ‘what-if’ analysis. The partnership with Sustainalytics, allows the firm to enhance the Style Skyline solution which now provides traditional fundamental equity factor analysis right alongside ESG factor exposure for a complete view of the portfolio’s style.
Peer Insights, Style Analytics’ portfolio peer-group product, will also use Sustainalytics’ ESG data to compare a portfolio with both a custom peer group and with specific funds from an ESG perspective, as well as to create portfolios with before- and after- snapshots that simulate a portfolio’s ESG profile based on contemplated rebalancing.
Sebastien Roussotte, Chief Executive Officer of Style Analytics, commented: “ESG has become a very important part of investing and we felt the need to enhance our ESG coverage and capabilities. Our collaboration with Sustainalytics has allowed us to create the most insightful ESG portfolio analysis tool on the market. We believe our clients will find real value in the depth and breadth of these new capabilities.”
Bob Mann, President and Chief Operating Officer of Sustainalytics, said: “We are delighted to work with Style Analytics to help bring more in-depth ESG analysis to the market. With our data integrated into Style Analytics’ range of products and services, investors now have access to a rich set of ESG information to support their portfolio analysis and monitoring activities.”
In late 2018, STOXX announced a collaboration with the ESG data provider Sustainalytics for a product involvement screening for controversial weapons, tobacco, and thermal coal as well as a norm-based screening that follows the United Nations Global Compact principles of human and labor rights, the environment, business ethics, and anti-corruption. At the time, Sustainalytics Director of Index Partnerships Shila Wattamwar, said, “Sustainalytics’s screens for UN Global Compact, controversial weapons and tobacco have been used by our institutional clients for many years. However, we are seeing increasing demand for our screens on thermal coal mining and the generating capacity of coal-fired power plants as investors look more closely at their climate-related risks.”