Because environmental, social and corporate governance (ESG) issues are becoming more important to advisors and investors, TruValue Labs has launched a suite of products to measure how well corporations meet the goals of ESG investing.
TruValue Labs, based in San Francisco, has developed products that measure ESG compliance in real time, as well as calculating corporations’ compliance over both short and long terms.
“Several years ago we saw the need for better ESG and performance data for corporations,” says Hendrik Bartel, CEO and co-founder of TruValue Labs. “The data that was available was what the companies were reporting so it was subjective. It also was outdated by the time it got to the marketplace, and it was uncorrelated, varying widely from company to company.”
TruValue uses the Sustainability Accounting Standards Board data, information from public sources including news reports, as well as other big data sources to create scores that show how a corporation is meeting ESG standards, how it is performing financially and how it is trending over time, Bartel says. The scores reflect real-time events.
TruValue Labs’ ESG Momentum was “built to serve investment professionals who know that today’s company valuations depend on performance in the areas of environment, social, and corporate governance,” adds Bartel.
The data shows existing performance levels, but also shows whether a company is making progress in meeting ESG standards, he says. “Studies have found that improvements in sustainability are often a better indicator of future success than a company’s current ESG score.”
In addition to an ESG Momentum Score and a Pulse Score, which charts ESG activity as events happen, the Insight360 platform includes a longer-term measure of ESG performance called the Insight Score, which is suitable for portfolio and index construction, Bartel says.
“When it comes to ESG issues, investment professionals need more than ratings based on annual, company self-reported information. They require timely data from an external, objective perspective. This next-gen ESG data incorporates events around the clock, with scores that demonstrate how company performance is changing over time.
“Financial advisors are often behind their clients when it comes to wanting to incorporate ESG performance into investing. This data allows advisors to tell a better, more complete, story to their clients,” he adds.
Fees for the use of the TruValue Labs products depend on the type of firm or research organization requesting the information and the intended use.