FNZ taps data analytics GIST to address ESG ratings bias

Rick Steves

The allocation of capital is critical to driving the change required to transition to net-zero and building a more sustainable economy and society.

FNZ has made a strategic investment in impact data and analytics company GIST to build on the existing collaboration between the two companies and form part of a wider partnership which sees GIST’s sustainability data integrated into its market-leading sustainable investment solution, FNZ Impact.

GIST provides investors and companies with quantitative, comparable, and verifiable measures of corporate impact and performance across all four capitals: natural, human, social, and produced.

FNZ Impact, the firm’s ESG data platform, will benefit from the strategic investment, which will accelerate the companies’ shared ambition to open-up wealth by making sustainability data more accessible and transparent so that investors can invest in the things they care about, on their own terms, according to the announcement.

FNZ Impact is integrated into the wider FNZ wealth management platform and helps financial institutions to provide their clients with hyper-personalized, transparent information around the environmental and social impacts of investment portfolios, offering the ability to optimise portfolios based not just on risk appetite, goals and tax but also by personal preferences and values.

Retail investors, their advisers and wealth managers can leverage FNZ Impact to better understand the issues that matter most to them and address these by allocating capital accordingly, making investment part of the solution to global challenges.

The FNZ wealth management platform supports over 650 of the world’s leading financial institutions and 8,000 wealth management firms in 21 countries.

GIST addresses biases in ESG ratings and rankings

Despite growing awareness and scrutiny of corporate ESG credentials from investors, current ESG ratings and rankings can pose challenges due to biases and a lack of standardisation, transparency, independence and credible information.

GIST addresses this challenge by using a science-based approach to measure and value corporate impacts in monetary terms based on the ‘Four Capitals’ framework (natural capital, human capital, social capital and produced capital), which is used by the United Nations.

Dr Vian Sharif, Head of Sustainability at FNZ, said: “The imperative for robust, science-based impact data has never been stronger, particularly ahead of a number of global regulatory changes, which require investment firms and advisers to incorporate clients’ ESG preferences into their suitability assessments. The allocation of capital is critical to driving the change required to transition to net-zero and building a more sustainable economy and society. By democratising information on the impact of portfolios, FNZ Impact empowers investors, their advisers and wealth managers to contribute to a sustainable future for the next generation through their investment decisions.

“In GIST, we believe we’ve found not only one of the most rigorous and transparent methodologies in the market, but a company and team with a mission aligned strongly to our own and whose growth we are excited to support.”

Pavan Sukhdev, Founder & CEO of GIST, said: “We are delighted to have FNZ as a strategic investor and a partner in our mission. FNZ and GIST have shared goals and we believe that, together, we can drive real, measurable change in the investment landscape by empowering investors with the impact data they need to make better informed decisions at all stages of investment life cycles, from asset selection to risk management to exits.

“Our shared mission is to embed GIST impact methodology and algorithms into every responsible investor’s toolkit. There has never been greater urgency for investors and corporations to recognise and quantify all dimensions of investment impacts, and in doing so, to redefine corporate performance.

“FNZ’s support will boost GIST’s objective to mainstream our solutions, enabling more and more investors and corporations to measure performance across all value dimensions, manage material risks, and make better decisions in the interest of shareholders as well as other significant stakeholders.”

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