Stockholm (NordSIP) – The Sustainable Development Investments Asset Owner Platform (SDI AOP) selected Qontigo as the exclusive distributor for SDI data following the launch of the Platform.
The project was initiated in September 2019 by APG and PGGM, at the behest of their pension fund clients ABP, bpfBOUW and PFZW. AustralianSuper and British Columbia Investment Management Corporation (BCI) have since joined the Platform. The asset owners collectively oversee US$1 trillion in assets. Qontigo is part of Deutsche Börse Group and was formed as the result of the merger of Axioma, DAX and STOXX.
The platform proposes solving the lack of quality data to identify contributions to the UN Sustainable Development Goals (SDGs) facing sustainable investors through standards and artificial-intelligence (AI) driven data. The SDI AOP provides a common definition, taxonomy, and data source for investments into the SDGs.
“The application of transparent rules-based methodologies, common definitions, taxonomies and strong data are the bedrock elements required for effective sustainable investing,” says Sebastian Ceria, Chief Executive Officer, Qontigo. “We are proud to be a part of the SDI Asset Owner Platform’s efforts to enhance the ability of investors to achieve their commendable goals in sustainable investing.”
“Qontigo and APG have a longstanding relationship going back to almost a decade ago as APG utilizes the Qontigo portfolio construction toolset as part of their investment process,” explains Ian Webster, Senior Managing Director at Qontigo who answered NordSIP’s questions. “When the SDI AOP was looking for a distribution partner they approached a number of firms in the market with discussions progressing over a number of months. We have a track record of flexibly delivering data and offering clients innovative solutions and ultimately, it was agreed that a close partnership model was the best way of moving forward. Although there are a number of firms involved in this initiative we aim to operate as one team with the goal of spreading the word on how this product can support the UN’s Sustainable Development Goals.”
Powered by AI, data science company Entis generates SDI classifications for 8,000 companies, enabling investors to assess their global capital markets’ portfolios on their contribution to the SDGs. The assessment creates a common auditable standard that facilitates more transparent and consistent reporting to clients and external stakeholders. The SDI definition and taxonomy are public and equally applicable to private market investments.
“We measure companies’ contribution to the SDGs through the companies’ products and services,” Claudia Kruse, Managing Director for Global Responsible Investment & Governance at APG told NordSIP. “This differs from companies’ contribution through their conduct, which has been in the scope of some of the more traditional ESG research platforms. These products and services are derived from the 17 UN SDGs. For all SDGs, we have explored how companies and issuers can contribute to achieving these goals,” she says.
The SDI taxonomy is public, Kruse points out, and the methodology shows how the platform proposes to map the 17 SDGs. For Kruse, COVID has certainly raised attention to the social dimension of ESG. “The SDI AOP taxonomy includes both the environment and social aspects, whereas, for instance, the EU taxonomy is currently only focused on the green or environmental dimension. In the market we have seen a growth in the issuance of social bonds, and/or bonds specifically linked to COVID-19 relief. We observe that COVID has further embedded the S within ESG and expect to see growth in investments with a social angle,” she adds.
“For PGGM this platform is an important next step in a process to mobilize ever more institutional capital around the big challenges of our time, as described in the SDGs,” says Eloy Lindeijer, Chief Investment Management, PGGM. “By collaborating with asset owners from different continents we hope that this SDI AOP will contribute to being a global standard for investors.’’
“The SDGs are global and launching this standard with asset owners from three continents shows our commitment to contribute to the SDGs, and we look forward to extending the collaboration,” says APG’s Kruse. “SDGs and AI-based technology are at the forefront of innovation. This investment is part of our commitment to our clients on whose behalf we invest in order to provide affordable pension in a sustainable world.”
The Platform will host a virtual event on 10 September 2020 to provide interested investors with additional insight into the workings of Platform.