BST Awards 2023: Best ESG data provider to the buy side—FactSet

Overview

Sustainable investing has permeated the market to become a mainstream investment principle. ESG regulations are proliferating globally, motivating―and in some cases regulating―investors to incorporate sustainability risk into their investment processes and integrate various data from multiple sources to prevent greenwashing. FactSet’s integrated ecosystem allows users to incorporate multiple sources of ESG data, alongside hundreds of its own datasets, from mandate creation and asset selection to portfolio monitoring and reporting.

The solution  

FactSet helps surface as-reported ESG metrics and identify potential greenwashing actions by providing the data required for a comprehensive ESG investment approach. Available via FactSet Workstation, feeds, and APIs, this multi-asset class data is connected to a single security/entity master identifier.

FactSet supports scalable ESG workflows, such as portfolio construction, analysis, and reporting by providing:

• Company-reported ESG metrics
• Thematic revenue exposure and product involvement
• External stakeholder information (via the Truvalue product suite)
• Third-party data (e.g., MSCI, Sustainalytics, and ISS)

Secret sauce 

FactSet clients can:

• Construct, monitor, and report on sustainable investments by incorporating multiple sources of ESG data from a library of third-party ESG content into their investment process, accessible via FactSet Workstation, feeds, or APIs.
• Identify potential investments flagged for greenwashing if they are part of a sustainable fund product. FactSet accomplishes this by exposing external stakeholder sentiment related to ESG performance through Truvalue scores and providing transparency into business exposure with supply chain relationship information.

Recent milestones

• Released Revere ESG Thematic Involvement, providing a detailed view of company revenue exposure and product involvement in FactSet-maintained ESG themes
• Launched the FactSet SFDR Principal Adverse Impact dataset alongside SFDR regulatory reporting solutions, allowing clients to select the vendor of their choosing (FactSet, MSCI, ISS, etc.) to underpin compliant and scalable reporting
• Released a detailed ESG report in the Workstation, enabling comparison of ESG metrics across vendors for individual companies, peers, and supply chains

Future objectives 

FactSet has focused its innovation and investments on expanding its breadth of content―collected by FactSet and integrated from third parties―to provide support for its clients’ most sophisticated investment strategies. This includes enhanced data in alternative and private markets, industry-specific deep-sector metrics, and real-time ESG intelligence.

Why they won

FactSet wins its second category in this year’s BST Awards, repeating last year’s success in the best ESG provider category. All indications suggest that 2023 is set to exceed sustainable investing’s high-water mark as investors the world over carefully consider more factors and drivers than pure returns. Given the renewed interest in ESG-driven investments, it’s fair to say that ESG is here to stay. A key component of any ESG data service is its ability to provide transparency and granularity into how ESG metrics were extrapolated, especially by corporates where greenwashing and self-reporting have historically been a concern. This is an area of the business where FactSet excels, providing its clients with much-needed transparency into and peace of mind around the data it curates and delivers to them.