MackeyRMS, a provider of SaaS-based research management software, has released an ESG Scorecards process to streamline investment selection, monitoring and reporting for ESG-focused portfolios.
ESG Scorecards was built in collaboration with MackeyRMS clients and is designed to "enable investment teams to integrate ESG ratings data from their preferred providers and build customized, repeatable, and auditable workflows to ensure holdings within investment portfolios meet the unique ESG criteria established by the fund manager."
Investment teams can use the product to grade securities and funds selected for inclusion in investment portfolios, monitor the ESG status of portfolio holdings in real time, and report details of their selection and monitoring process to internal and external stakeholders.
"We've seen growing demand from our investment management clients seeking to incorporate their firm's ESG selection criteria into their investment research process," said Will Keuper, vice president, head of product for MackeyRMS. "With ESG Scorecards, we're providing clients with a fully integrated, end-to-end workflow toolkit for scoring and monitoring ESG-focused investment portfolios."
The product permits investment teams to score individual holdings at the security or fund level, in aggregate across all names within a portfolio, or as a topline data point within individual company or fund tear sheets for reporting purposes.
It also allows clients to view real-time ESG status for all portfolio holdings as a field within investment research dashboard and set automated alerts when an ESG-related research action should occur, and publish in-app notes and descriptions of ESG status of portfolio holdings and outline next steps for ensuring status is maintained.
Further features permit investment teams to highlight and track key criteria and issues that need to be reconciled in order to certify a company or fund for inclusion within a portfolio as well as integrate internal and third-party data sources into ESG workflows and company or fund tear sheets.
Investors and asset owners are increasingly using ESG factors in their investment process, FS Sustainability has previously reported.
According to the Responsible Investment Association Australasia Responsible Investment Benchmark Report 2020 Australia report, a vast majority - 87% of responsible investment AUM - is managed using ESG integration as a primary approach.
The marked jump for ESG integration (47%) from $680 billion in 2018 to $1 trillion indicates that survey respondents are increasingly recognising that ESG factors provide better and more informed investment decisions, such as valuation and asset allocation.
Seventy-nine percent of investment managers in the Responsible Investment Research Universe have at least one asset class (or 50% AUM) covered by an explicit and systematic approach to ESG integration, while only 41% have more than three asset classes (or 85% of their AUM) covered.