MUFG Investor Services has launched a private markets environmental, social and governance (ESG) reporting solution, as it looks to shine a light on an area which has been traditionally difficult to collect data on.
The launch comes just two weeks after the securities services provider launched its ESG reporting solution for public markets.
For its private markets offering, MUFG has partnered with sustainability consultancy, MJ Hudson, to provide array of services for investors, starting at the pre-investment stage.
The solution will allow data to be collected in an automated way, with an overlay of ESG expertise from analysts, while being tailored to industry, investment, and client requirements.
The services in the launch pertain to policy creation and investment strategy integration, Sustainable Finance Disclosure Regulation (SFDR) consultancy and due diligence, as well as ESGIQ – a proprietary digital platform for the monitoring of and reporting on ESG factors.
The services will be available to institutional investors, fund of fund managers and general partners investing in or operating any private market strategies, including private equity, venture capital, private debt, infrastructure and real estate.
“As EU ESG regulatory requirements continue to evolve, and private markets are increasingly faced with a lack of available ESG data, our new solution will support fund managers by ensuring they can navigate these changes, and have access to robust, customised ESG data and assessments, that uncover red flags and identify value-creation opportunities,” said John Sergides, CEO at MUFG Investor Services.
“The solution will also help fund managers to assess the ESG governance and sustainability profile of underlying assets, as well as evaluate exposures to exclusion industries, and is an important step towards ESG transparency across private markets.”
Sergides recently spoke to Global Custodian about the challenges of collating ESG data for the illiquid space and how technology can be utilised in the future.
“The assets in hedge are – let’s say – close to $3 trillion, on the private equity side $4 trillion, real estate and everything in between, there are a huge amount of assets that aren’t serviced,” he explained.
“A lot of the data in the private space won’t be available at this point in time from streamlined sources, so this is where you deploy your technology like AI to scrape those sources and build your own. This is where the differentiation starts.”