FINBOURNE Technologies announces a new partnership with Denominator, a global Diversity, Equity, and Inclusion (DEI) data and scoring provider. The goal of the partnership is to closely support the global buy side, as it responds to growing demands for DEI transparency among a new generation of value-driven investors.
The integration of Denominator’s unique data set is a timely addition to FINBOURNE’s flagship investment management platform, LUSID, following the announcement from the Principles for Responsible Investment (PRI) earlier this year. The UN-backed network of institutional investors, with a combined AuM of $130 trillion, has called on signatories to implement DEI reporting on investment holdings and supply chains, and is expected to trigger increased scrutiny from global regulatory bodies.
A combination of heightened investor and regulatory expectations, including recent DEI policy consultation from the UK Financial Conduct Authority (FCA)*, is driving buy-side need for holistic and detailed insight into the DEI performance of portfolio companies. Given the number of holistic ESG assessments and methods on the market, detailed analysis and interpretation of DEI data has now become a complex and heavy manual task for many asset managers, who often focus narrowly on gender at the board level.
FINBOURNE and Denominator are looking to turn this challenge into an investment opportunity, drive fact-based decisions, improve transparency and accountability to end-investors and ultimately close the global DEI gap through positive engagement.
Creating an investable universe using the largest range of DEI metrics on the market
Through the integration, FINBOURNE’s clients have seamless access to DEI data and denominator data sets including scores on 15,000+ public companies and over 1.5 million private companies. Built on internationally recognized frameworks, including the UN Global Compact’s Sustainable Development Goals and the World Economic Forum’s Gender Equality, Denominator provides the most comprehensive data set of its kind.
With the ability to add 250+ unique DEI variables across 15+ dimensions (gender, race, age, nationality, education, sexuality, disability, health…) asset managers can create and manage an informed investable universe, with the ability to score and forecast portfolios. It does not only include popular variables, for example the % of women and ethnic minority board members and Executive-level employees, but also more unique metrics, such as cognitive diversity, educational diversity among board members and senior management.
Enhancing trust and transparency for end-investors
Integrating DEI data directly into investment operations assures asset managers and end-investors that funds are accurately monitored and reported, based on mandated outcomes. This enables tracking progress over time, across a specific attribute or the entire portfolio, to make more informed investment decisions and to report both internally and externally. Furthermore, firms can view raw data and final scores, choosing between proprietary arguments for the denominator, or adding their own methodology to create their ‘secret sauce’.
Offering competitive investment strategies and products
The partnership aims to broaden the DEI footprint to the global investment community, support current data challenges and importantly advocate for investment opportunities that can be derived from the denominator’s diverse data set. Leveraging new and competitive capabilities, asset managers can launch new ESG funds and products with a DEI-specific mandate and reach untapped markets, such as the recent phenomenon of women’s investment platforms.
Anders Rodenberg, CEO of Denominator Comments: “We are truly excited about this partnership with Finbourn Technologies. The integration of our broad diversity, equity, and inclusive data enables the global buy side to deploy new and customized investment strategies that will appeal to investors and provide a competitive edge. Like the E in ESG, We aim to turn the dial on this important social element of ESG, from negative screening and best effort reporting, to increasing positive engagement with global companies and making DEI an active priority for global business and society.
Matthew Lough, Head of Partnerships at Finbourn Technologies Adds: “Partnering with Denominator empowers our clients to create and manage an exciting new range of portfolios with quality data, catering to previously underserved segments of the population. Unlike measures like emissions that are difficult to conceptualize, we are all able to look around our workplaces and see diversity, or the lack thereof. Our close partnership with Denominator provides our clients with actionable data and insights to invest in companies that deliver strong returns along with a real commitment to DEI values.”
Source: Finbourn Technology