Arabesque announced today an agreement to work with State Street (NYSE:STT), one of the world's largest custody banks, to integrate environmental, social, and governance (ESG) data into its service offerings through Arabesque's proprietary technology.
State Street's ESG Solutions business will offer Arabesque S-Ray™, an algorithm-based technology that analyzes the sustainability performance of the world's largest listed corporations using self-learning quantitative models and data scores, as a risk management and compliance measure.
It works by systematically combining over 200 ESG metrics with news signals from over 50,000 sources across 15 languages. It is the first tool of its kind to rate companies on the normative principles of the United Nations Global Compact: Human Rights, Labor Rights, the Environment, and Anti-Corruption (GC Score). Additionally, Arabesque S-Ray™ provides an industry-specific assessment of companies' performance on financially material sustainability criteria (ESG Score). Both scores are combined with a preferences filter that assesses a company's business involvements.
Andreas Feiner, Head of ESG Research at Arabesque, said: "We believe that ESG data provides a new dimension to investing, giving investors more information than ever before about the DNA of a company. Arabesque S-Ray™ has been designed to provide investors with greater transparency around the sustainability of the world's biggest corporations. We are delighted to be working with State Street to offer this proprietary technology, as part of a new and long-term collaboration that reflects our goal of making sustainability available to all."
Mark McDivitt, head of ESG Solutions at State Street Global Exchange said: "As a reliable and responsible financial partner, State Street is committed to integrating ESG factors into processes that improve investment outcomes for our clients. Evidence suggests that companies outperforming their peers on sustainability issues may be more likely to display better returns, and as a result we are seeing increased demand for ESG based products."
McDivitt added: "By utilizing Arabesque S-Ray™ scores, our ability to delve beneath the surface of corporations and assess non-financial performance will be greatly enhanced."
Arabesque is a specialist ESG Quant fund manager that uses self-learning quantitative models and big data to assess the performance and sustainability of globally listed companies. Its investment technology processes over 100 billion data points to select an investment universe of equities, integrating environmental, social, and governance (ESG) information with quantitative strategies.