Continuing its focus on adding capabilities with an ESG theme, Refinitiv has teamed up with Los Angeles-based MarketPsych to launch Refinitiv MarketPsych ESG Analytics to monitor perceptions of sustainability and ESG risk. The analytical tool draws upon news and social media monitoring to offer analysts and portfolio managers numerical insights into companies and countries of interest, complementing Refinitiv’s range of ESG scoring services.The new service adds context to Refinitiv’s existing ESG data by offering an external ‘outside-in’ perspective on a company or country’s sustainability by processing millions of global articles and social media posts in near real-time.
Refinitiv MarketPsych ESG Analytics can be deployed across a number of use-cases. Quantitative investors can use the data to enhance alpha generation and risk management. Discretionary investors can use the data to improve portfolio construction. Corporate clients can monitor market perceptions of their own and competitor firms. Regulators can use the data to more precisely direct investigations. Analysts and researchers can explore relationships between ESG and economic performance. Governments are able to monitor media perceptions of their activities.
According to Leon Saunders Calvert, Head of Research & Portfolio Management, Refinitiv, the new service “augments Refinitiv’s ESG company disclosed data with sophisticated AI tools to create high frequency sentiment data on ESG considerations based on news and social media.”
Refinitiv MarketPsych ESG Analytics is underpinned by a complex AI-based natural language processing (NLP) engine, which locates, filters and scores ESG-themed content pertaining to specific companies as well as cities, regions and countries from tens of millions of authors in thousands of global resources. The NLP engine excludes corporate press releases, corporate websites and regulatory filings in order to maintain the outsider perspective of third-party media and minimize the impact of corporate ‘greenwashing’.
The ESG data feed publishes scores on over 100 ESG themes and controversies on a minutely, hourly and daily basis. The data covers 30,000+ companies and 252 countries and territories. The data history extends back to 1998, and companies were added point-in-time to facilitate quantitative research and minimize survivorship bias. Scores are published on key ESG themes such as intellectual property violations, management scandals and ESG policy failures.
Richard Peterson, CEO, MarketPsych, says the services allows “clients [to] explore how media perceptions and corporate behavior impact business performance over time. For example, we’ve found that the share prices of companies with higher Workplace Sentiment scores significantly outperform their peers, and it appears that happier employees generate more value for shareholders. We hope that such insights inspire positive changes in corporate structure and behavior.”