MUFG Investor Services has launched a new environmental, social and governance (ESG) reporting solution in what it says is the first in a line of upcoming sustainability developments for clients.
The initial source being used for the solution is ESG data science company RepRisk, selected for its use of artificial intelligence (AI) and machine learning technologies, combined with human intelligence to identify ESG risks.
MUFG Investor Services will continue to add data sources while expanding its capabilities in private markets as well as refining public market coverage.
The news follows comments from its CEO, John Sergies, to Global Custodian earlier this month about the importance of ESG and the securities services provider’s role in supporting clients.
“Our role in this is to connect A to B, to be that independent arbitrator, to be able to show what a score is and help people understand and follow it,” he said in the interview.
“We look at it from all angles because we are huge in the financial services space. We have commitments way beyond investor services to how much will be linked to ESG services, from asset management arms to financing, risk, compliance and down to investor services. So we have the ability to leverage a much bigger organisation and look at this from more than a service provider aspect.”
Within the reporting suite, ESG data will be mapped to a client’s portfolio, providing a top-level portfolio rating, highlighting top and bottom performing positions. Additional analysis will also be provided based on sector, asset class as well as other metrics.
The service will extensively analyse both private and public markets to ensure coverage of a client’s entire portfolio.
In the interview with Global Custodian earlier this month, Sergides discussed the challenges of collating ESG data for the illiquid space.
“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,” he said.
MUFG Investor Services announced three senior hires across its global business earlier this week, with Simon Coombes joining the business development team, data science expert Vasilis Sotiris becoming head of data engineering and strategy, and Christina Villa taking on the role of head of IT business management and planning.