Stockholm (NordSIP) – The scarcity of relevant and reliable data sources remains a recurrent concern for sustainable investors, particularly in light of increasing sustainable disclosure requirements in Europe, since the implementation of the Sustainable Finance Disclosures Regulation (SFDR).
To address this issue, global sustainability technology company Clarity AI has partnered with investment management solutions provider SimCorp. This partnership aims to help institutional investors access AI-powered datasets, facilitate alignment with EU sustainable finance regulations and implement impact investing strategies.
Growing Demand for Disclosure Services
According to the 2022 Global Sustainable Fund Flows report, the EU accounts for 83% of global assets invested in sustainable funds and 20% of fund assets in Europe are classified as sustainable. Impact investors, due to the advanced level of sustainable change they hope to facilitate, are particularly confronted with the problem of data scarcity during their disclosures.
A recent survey by BNP Paribas Asset Management found that more than 50% of investors are currently using or are planning to use thematic investing, and 70% of thematic investors plan to increase their focus over the next three years. In Europe, one of the main drivers of this trend is being able to market products as Article 8 or Article 9 under SFDR.
To meet this growing demand, SimCorp’s investment management platform offers its users Clarity AI’s dataset based on the Sustainable Development Goals (SDGs) with the ability to customise scores based on intended sustainability outcomes. Clarity AI analyses more than 70,000 companies, 420,000 funds, 201 countries, and 199 local governments.
“Institutional investors are increasingly prioritising their ability to accurately measure and oversee the societal effects of their investments. Aligning with the SDGs has now become an established norm within the industry. Clarity AI’s extensive SDG dataset brings a high level of completeness, and we are thrilled to seamlessly integrate it into our ESG and sustainable investment solutions. This integration offers SimCorp clients effortless access to top-quality data, further enhancing their investment decisions,” said Carl Balslev Clausen, Director and Head of ESG Product Management at SimCorp.
The New Partnership
“Amid the rapid evolution and diversification of regulatory frameworks and increasing demand for access to high quality, accurate, timely sustainability data, Clarity AI stands out by delivering a flexible, and scalable solution. Our approach is comprehensive, providing the required data, methodologies, and tools to comply with all regulatory requirements,” said David Silver, Head of Solutions at Clarity AI.
“We are thrilled to partner with SimCorp to expand the use of reliable, accurate data to meet regulatory requirements and drive more capital into sustainable finance without adding unnecessary complexity,” Silver added.
“With Clarity AI’s data seamlessly integrated into SimCorp’s investment management platform, sustainability analysis becomes an integral part of the complete end-to-end investment process. Our mutual clients benefit from advanced process automation, rigorous control checks of their sustainability-related policies, and effortless access to ESG analytics,” Balslev Clausen added.
Clarity AI’s solutions for SFDR and EU Taxonomy are based on methodologies that leverage advanced technology to streamline data collection and processing and reduce errors associated with manual work. “Through the use of AI-powered reliability checks, trained and supervised by a global team of data science and sustainability experts, we ensure our data is of the highest quality and consistent throughout all areas of sustainability, such as regulatory compliance or impact measurement,” Silver concludes.