New Capability Provides Insights to Support Institutional Investors’ Governance, Risk Management and Regulatory Reporting
Submitted by Northern Trust Corporation
Northern Trust (Nasdaq: NTRS) has enhanced its analytical capabilities to provide pension funds and other global institutional investors with heightened insights and transparency over their environmental, social and governance (ESG) risk exposures.
The ESG Analytics Summary, prepared by Northern Trust’s Investment Risk and Analytical Services group, provides investors with periodic snapshot analysis across their equity and corporate bond portfolios – setting out investment ‘scores’ against a range of ESG factors, United Nation’s (UN) Global Compact principles and business activity flags.
This detailed analysis enables investors to track changes in a fund’s ESG profile over time, compare results on an absolute and relative basis, and compare asset managers’ scores against each other. These insights are generated by combining Northern Trust’s extensive global custody asset information with data provided in partnership with information services provider IdealRatings.
Institutions can use the resulting data to support their governance and oversight objectives – for example, providing evidence of their ESG scores and exposures and supporting adherence to regulatory requirements and global standards. It can be used to facilitate discussions with their investment managers and manage potential stakeholder concerns and reputational risk.
ESG analytics can also supplement traditional investment analytics – providing a more holistic view of investment risks, exposures and opportunities. For example, during volatile market conditions, understanding the strength of a company’s governance structures and processes can give investors a timely and more complete picture of its resiliency.
Serge Boccassini, product lead, Investment Accounting and Analytic Solutions at Northern Trust, said: “ESG rules play a heightened role in global investor considerations, with institutions increasingly seeking to integrate sustainability factors into their portfolios. To achieve that effectively, it is vital they understand their investment risks. Our analysis provides insights into clients’ ESG exposures to help them identify financial risks and opportunities – and help ensure their investments continue to be aligned with their values.”
Mohamed Donia, CEO of IdealRatings, said: “We are delighted to partner with Northern Trust to provide insights into global investors’ portfolio exposures. The ESG Analytics Summary provides enhanced transparency to help investors avoid companies that pose a greater financial risk due to their ESG practices – as well as satisfy regulatory requirements and meet global standards.”
Northern Trust’s Investment Risk & Analytical Services group provides asset owners and asset managers around the world with innovative analytical solutions, supporting over US$5 trillion (as at 31 December 2019) in assets under measurement. With consultants in Chicago, London, Singapore and Melbourne, the group provides performance measurement, risk analysis and investment compliance monitoring – enabling clients to gain greater insights into their investments for more informed decision making.
Northern Trust's Investment Risk and Analytical Services ESG analytics are complemented by the extensive capabilities of its asset management business. Entrusted with US$975 billion of investor assets, Northern Trust Asset Management has more than 30 years of sustainable investing expertise and innovation, has been a signatory to the Principles of Responsible Investment since 2009, and manages four of the top 10 largest Sustainable Investing index funds globally (source: eVestment data as of December 31, 2019).
About Northern Trust
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of wealth management, asset servicing, asset management and banking to corporations, institutions, affluent families and individuals. Founded in Chicago in 1889, Northern Trust has a global presence with offices in 22 U.S. states and Washington, D.C., and across 22 locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of March 31, 2020, Northern Trust had assets under custody/administration of US $10.9 trillion, and assets under management of US $1.1 trillion. For more than 130 years, Northern Trust has earned distinction as an industry leader for exceptional service, financial expertise, integrity and innovation. Visit northerntrust.com or follow us on Twitter @NorthernTrust.
Northern Trust Corporation, Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A., incorporated with limited liability in the U.S. Global legal and regulatory information can be found at https://www.northerntrust.com/terms-and-conditions.
IdealRatings, incorporated in San Francisco, is a global solutions provider for Responsible Investments. Its database solutions for Equities, REITs, and Fixed Income are aimed at global investment managers and asset owners. IdealRatings solutions are licensed by leading financial institutions, asset managers, index providers, data vendors and brokerage firms in over 25 countries across all continents. Visit IdealRatings’s website at www.idealratings.com
This material is directed to professional clients only and is not intended for retail clients. For Asia-Pacific markets, it is directed to expert, institutional, professional and wholesale investors only and should not be relied upon by retail clients or investors.
IMPORTANT INFORMATION. This material is provided for informational purposes only. Information is not intended to be and should not be construed as an offer, solicitation or recommendation with respect to any transaction and should not be treated as legal advice, investment advice or tax advice.
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Northern Trust is a leading provider of asset servicing, fund administration, investment management, banking and fiduciary solutions for corporations, institutions, and affluent individuals worldwide.
Since 1889, when Northern Trust was founded in Chicago, we have aligned our efforts with our three guiding Principles That Endure: Service, Expertise, and Integrity. Together, they reflect the three cornerstones of business conduct which we strive to instil in our employees, whom we call partners, and to provide to our clients and the communities we serve worldwide.
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