ESG provider to custodians secures $20 million from German investment firms

Arabesque S-Ray, which supples ESG data to State Street and BNY Mellon, secures funding from four German investment firms.

By Jonathan Watkins

An environmental, social, and governance (ESG) data provider to custodians and other financial institutions has secured $20 million of funding from the investment units of Allianz, Commerzbank, DWS Group, and Land Hessen.

Arabesque S-Ray provides technology using ESG big data and machine learning models for firms to assess the sustainability performance of over 7,000 companies globally.

The provider’s data underpins a range of reporting tools launched by BNY Mellon earlier this year to track investments based on ESG issues and United Nations Global Compact (UNGC) principles.

In 2017, Arabesque also announced it was working with State Street to integrate its data into the custodian’s service offerings.

“The issues of climate change and human rights, as well as the United Nations Sustainable Development Goals, are now widely understood throughout society. And the financial sector can make a decisive contribution to a more sustainable economic system,” said Andreas Feiner, CEO of Arabesque S-Ray GmbH.

“The demand for ESG data and services is increasing exponentially. Our partnership with three of the leading financial institutions in Germany, together with the state of Hessen – with its focus on sustainability and technology – will enable us to meet this global demand from Frankfurt.”

Through the funding, Arabesque S-Ray said it will aim to enhance its client relationships and expand its business by developing new ESG data products and services to meet growing global demand for sustainability information. This will include S-Ray Real Estate, an AI-based tool for evaluating the sustainability of real estate objects.

The technology will use traditional data sources on an asset-level, together with new emerging digital sources from Internet of Things (IoT) sensors and devices within buildings.