SimCorp, a leading provider of investment management solutions, has joined forces with Clarity AI, a global sustainability technology company, to unlock opportunities in sustainable finance. This partnership aims to provide institutional investors with access to AI-powered datasets, enabling them to align with the European Union’s (EU) sustainable finance regulations and execute impactful investment strategies.
The EU is at the forefront of sustainable finance, with 20 percent of the region’s fund assets classified as sustainable. Moreover, the EU accounts for 83 percent of global assets invested in sustainable funds, as highlighted in the 2022 Global Sustainable Fund Flows report.
Despite stringent regulations like the Sustainable Finance Disclosure Regulation (SFDR) and the EU Taxonomy, which are designed to combat greenwashing and enhance transparency, institutional investors face challenges related to data availability, reliability, and comparability. These challenges put them at risk of using inaccurate or outdated company evaluations, exposing them to potential reputational and investment risks.
Clarity AI stands out by delivering a flexible and scalable solution to address these challenges. The company offers comprehensive access to high-quality, accurate, and timely sustainability data, along with the necessary methodologies and tools to comply with all regulatory requirements. David Silver, Head of Solutions at Clarity AI, expressed his enthusiasm about the partnership, stating, Our approach is comprehensive, providing the required data, methodologies, and tools to comply with all regulatory requirements.
The integration of Clarity AI’s data into SimCorp’s investment management platform allows sustainability analysis to become an integral part of the complete end-to-end investment process. Mutual clients of both companies can benefit from advanced process automation, rigorous control checks of sustainability-related policies, and effortless access to environmental, social, and governance (ESG) analytics. Carl Balslev Clausen, Director and Head of ESG Product Management at SimCorp, emphasized the advantages of this integration, stating, Our mutual clients benefit from advanced process automation, rigorous control checks of their sustainability-related policies, and effortless access to ESG analytics.
Clarity AI’s award-winning solutions for SFDR and the EU Taxonomy are built on methodologies grounded in advanced technology, which streamline data collection and processing while reducing errors associated with manual work. By leveraging AI-powered reliability checks supervised by a global team of data science and sustainability experts, Clarity AI ensures that its data is of the highest quality and consistent throughout all areas of sustainability, including regulatory compliance and impact measurement.
Sustainable finance is not only driven by regulatory compliance but also by the adoption of the United Nations Sustainable Development Goals (SDGs) framework. This framework has become a crucial tool for reporting on impact, developing engagement strategies, and creating new revenue opportunities through thematic funds. A recent survey by BNP Paribas Asset Management revealed that more than 50 percent of investors are currently using or planning to use thematic investing, and 70 percent of thematic investors plan to increase their focus in this area over the next three years. In Europe, the ability to market products as Article 8 or Article 9 under SFDR is a significant driver of this trend.
To meet the growing demand for sustainable and impact-focused investments, SimCorp’s investment management platform offers its users Clarity AI’s SDGs dataset, allowing them to customize scores based on intended sustainability outcomes. Clarity AI analyzes over 70,000 companies, 420,000 funds, 201 countries, and 199 local governments, making it the market leader in terms of coverage.
The integration of Clarity AI’s extensive SDG dataset into SimCorp’s ESG and sustainable investment solutions provides SimCorp clients with effortless access to top-quality data, enhancing their investment decisions. Balslev Clausen highlighted the significance of this integration, stating, This integration offers SimCorp clients effortless access to top-quality data, further enhancing their investment decisions.
In conclusion, the partnership between SimCorp and Clarity AI brings together expertise in investment management solutions and sustainability technology to unlock opportunities in sustainable finance. By providing institutional investors with access to reliable and accurate data, the partnership supports compliance with regulatory requirements and facilitates impactful investment strategies. The seamless integration of sustainability analysis into SimCorp’s investment management platform enhances the overall investment process for mutual clients. As sustainable finance continues to gain momentum, partnerships like these play a crucial role in driving capital towards investments that align with environmental and social objectives.
