The integration of ESG (Environmental, Social & Governance) factors has transitioned from a Why to a How
Compared to financial data, the ESG data availability and quality differs significantly. Our clients are looking for ways to power their risk analysis and fulfill regulatory requirements in a cost-effective way.
We offer our clients a clear roadmap for 1) accessing and collecting the exact ESG data they need, and 2) integrating it into their existing reporting framework.
Triple Challenge: Data, Regulation & Framework
Data. ESG data is in its infancy compared to mature financial data. Choosing the right ESG data provider remains such a mystery that some firms sign up for every available data feed and then try to make sense of it.
Regulatory Framework. Regulators are grappling with what ‘sustainable’ means and what can or cannot be tracked. The regulatory framework is in the process of being developed, and regulators signal a clear desire to stop short of over-defining each factor.
Individual Investment Mandates. Each financial services firm must consider what the appropriate ESG framework should be given their investment policy, and then plan on how to integrate ESG factors into their reporting, processes and governance.
ESG Data and Ratings Providers
Numerous ESG data providers offer a variety of datasets. ESG data currently lacks standardization. Therefore, each data provider interprets its data points differently.
The methodologies used to interpret the collected non-financial information often lack in transparency or appropriate documentation
The underlying data elements used by data providers to calculate the ESG ratings/scores often lack transparency
The data feeds that are not comparable make it difficult to combine them into a comprehensive analytical and reporting framework.
Our Data Capabilities
AlphaMille has strong data capabilities. We offer full lifecycle software development services and excel at data integrations because they have been an integral part of our projects.
Our technology team has experience with implementing complex data solutions including Pitchbook, later acquired by Morningstar (NASDAQ: MORN) - a global financial services firm with a market cap over $6B.
One of the aspects of the project included a development of a new micro-service called News Trend Detection Service. A large amount of data - around 50,000 articles a day - was processed using carefully selected Machine Learning algorithms. Read more.
A proprietary ESG rating or score
We help clients develop in-house methodologies and proprietary ESG ratings/scores required for the investment decision-making and risk management.
Our clients use our ESG data services to enhance transparency and detect potential adverse sustainability impacts or risk factors. AlphaMille’s agile approach manifests in supporting the flexibility of fulfilling different investment mandates with different ESG methodologies. This allows our clients to fulfill their reporting requirements and mitigate the ESG risks that had been identified.
Our Custom ESG Data Collection Capabilities
When a client’s framework, or scorecard, calls for custom data collection, we use multi-modal AI to gather any type of input (text, picture, video, audio) in any language, and produce the custom data required. For example, data on the gender composition of a board of directors cannot be purchased for certain types of privately held entities. Our Robotic Process Automation solution finds audio/visual data, transcribes, translates and summarizes it. We integrate resulting data collection into our client’s scorecard and reporting infrastructure.
Our ESG Reporting Capabilities
We work with our clients to set up a framework for collecting structured and unstructured ESG data. This data needs to be integrated into the client’s reporting infrastructure.
AlphaMille offers proprietary, yet customizable solutions that can be applied to enhancing the existing reporting capabilities or, in certain cases, creating a brand new reporting solution.
Our ESG Team
Our dedicated Data Science AI/ML team has full-time Data Analysts, Data Engineers, Data Scientists (PhDs), Machine Learning and Service Reliability Engineers with hands-on knowledge of Data Engineering and Analytics, Image Processing & Video Analysis, and Natural Language Processing and Decision Management.