New York-based Clarity AI, a sustainability technology platform that uses machine learning to deliver environmental and social insights to investors, has announced the integration of its data offering into Copenhagen-based SimCorp’s investment management platform.
This collaboration aims to assist institutional investors in aligning with EU sustainable finance regulations and effectively executing impact investing strategies using AI-powered datasets.
Solutions for SFDR and EU Taxonomy
The European Union claims to be a leader in sustainable finance, with 20 per cent of the region’s fund assets being sustainable and according to the 2022 Global Sustainable Fund Flows report, it is holding 83 per cent of global sustainable fund assets.
Despite stringent regulations like the Sustainable Finance Disclosure Regulation (SFDR) and the EU Taxonomy to promote transparency, challenges in data availability and reliability persist. And these challenges could lead to inaccurate evaluations of companies, risking institutional investors’ reputations and investments.
Carl Balslev Clausen, Director and Head of ESG Product Management at SimCorp says, “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,” adds Clausen.
Clarity AI has developed solutions for SFDR and EU Taxonomy that utilise innovative methodologies. These approaches are designed from scratch and incorporate advanced technology to simplify data collection and processing, thereby minimising errors that often arise from manual processes.
David Silver, Head of Solutions at Clarity AI says, “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.”
Brief about SimCorp
Established in 1971, SimCorp is a provider of industry-leading integrated investment management solutions.
Its platform encompasses an ecosystem of partners, services, and third-party connectivity, enabling it to serve 40 per cent of the world’s top 100 financial companies. This offering grants these companies the efficiency and adaptability required for success.
SimCorp’s global presence is evident with over 25 offices globally and a team of over 2,450 employees, facilitating seamless connections across continents and industries.
Aim of the partnership
The United Nations Sustainable Development Goals (SDGs) framework is essential for reporting impact, developing engagement strategies, and creating revenue opportunities like thematic funds.
A recent survey by BNP Paribas Asset Management shows that over 50 per cent of investors are using or planning to use thematic investing, and 70 per cent of thematic investors plan to increase their focus in the next three years. In Europe, the ability to label products as Article 8 or Article 9 under SFDR is a significant driver of this trend.
To meet this demand, SimCorp’s investment management platform offers Clarity AI’s SDGs dataset, allowing customisable sustainability scores.
Clarity AI’s extensive analysis covers over 70,000 companies, 420,000 funds, 201 countries, and 199 local governments, surpassing competitors in a breadth of coverage.
Balslev Clausen says, “Institutional investors are increasingly prioritizing 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.”
David Silver adds, “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.”
“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.”
Brief about Clarity AI
Clarity AI is a sustainability technology platform utilising machine learning and big data to provide environmental and social insights to investors, organisations, and consumers.
Integration with partners like SimCorp facilitates easy adoption. Its impact extends to 150 million consumers through 400,000 merchants.
Clarity AI operates globally, serving clients managing trillions in assets, including major names like Invesco, Nordea, BlackRock, Santander, Wellington, and BNP Paribas.