Finbourne Technology has entered a new partnership with Denominator, a global diversity, equity, and inclusion (DEI) data and scoring provider, which will aim to closely support the global buy-side, as it responds to increasing demands for DEI transparency, amid a new generation of value-based investors.
The integration of Denominator’s unique data set is a timely addition to Finbourne’s flagship investment management platform, LUSID, following an announcement from the Principles for Responsible Investment (PRI) earlier this year.
The UN-supported network of institutional investors, with a combined assets under management of $130trn, has called on signatories to enforce DEI reporting across investment holdings and the supply chain, and is expected to trigger increased scrutiny from regulatory bodies worldwide.
The combination of heightened investor and regulatory expectations, including the more recent DEI policy consultation from the UK Financial Conduct Authority (FCA), is escalating investors’ need for holistic and granular insight into the DEI performance of portfolio companies.
Given the number of aggregated ESG ratings and methodologies in the market, the detailed analysis and interpretation of DEI data has now become a complex and heavily manual task for many asset managers, often leading to a narrow focus on gender at board level.
The duo is seeking to turn this challenge into an investment opportunity, to drive fact-based decisions, improve transparency and accountability to end-investors, and ultimately close the global DEI gap through positive engagement, it was announced.
Through the partnership, Finbourne’s clients will be able to access Denominator’s data set with DEI data and scores across 15,000+ public companies and more than 1.5 million private companies.
Denominator’s data set is built on internationally recognised frameworks, including the UN Global Compact’s Sustainable Development Goals and World Economic Forum’s Gender Parity.
Matthew Luff, head of partnerships at Finbourne, said: “Partnering with Denominator empowers our clients with quality data to create and manage an exciting new range of portfolios, catering to previously underserved sections of the population. Unlike measures such as emissions which are harder to conceptualise, we are all able to look around our workplaces and see diversity, or a lack of it.”
He added: “Our close partnership with Denominator delivers our clients actionable data and insights, to invest in those companies that are making strong returns, alongside a real commitment to DEI values.”
Integrating DEI data directly into investment operations assures asset managers and end-investors that funds are accurately monitored and reported, based on mandated outcomes. This also enables progress to be tracked over time, in a specific attribute or the whole portfolio, to make more informed investment decisions and report both internally and externally.
Anders Rodenberg, chief executive officer of Denominator, said: “The integration of our exhaustive DEI data will enable the global buy-side to harness new and customised investment strategies that will appeal to investors and deliver competitive edge.”
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