Alveo (formerly Asset Control) has expanded its ESG data management capability by extending its standard industry data model and user interface to help clients understand ESG data quality, data lineage and divergence between third-party ratings.
Driven by regulations such as the EU’s Sustainable Finance Disclosure Regulation (SFDR), the Alveo data model now incorporates the data fields required to address the SFDR’s Principal Adverse Impact (PAI) sustainability indicators applicable to investments in investee companies, sovereigns and supranationals, and real estate assets. Business rules support completion of missing data points based on peer group analysis, converting reporting bases and units of measurement, and proxying information based on historical records.
“ESG is the biggest data management requirement to hit the buy-side for some time,” says Mark Hepsworth, CEO at Alveo. “We see clients requiring access to multiple ESG data sources and increasing volumes of data. At the same time, clients want to manipulate this data and make their own decisions about it and how they present it to their clients.”
To meet the need for multiple data sources, Alveo has also extended its standard library of off-the-shelf connectors with financial data feeds. The company’s Ops360 user experience includes dashboards showing the sourcing, processing and completion status of data requirements, as well as insight into data quality metrics and complete lineage to show the provenance of reported data fields. Clients can also use Alveo to integrate multiple sources of ESG data and derive analytics, for example showing the divergence between third-party ratings or the creation of clients’ proprietary ratings.
“Alveo’s multisource approach to data management is well suited to address ESG data management requirements,” says Neil Sandle, head of product management at the company. “With wide dispersion in third-party ESG ratings and the need for granular reporting against the SFDR’s PAIs, firms need to combine different sources with their expertise. ESG data is essentially reference data that we have been helping clients manage for many years.”