AssetMetrix, ESG Partnership, Proof, Interview

Private market investors are increasingly recognizing the benefits of using ESG & impact metrics as key performance indicators in their investment selection process. As regulators intensify their efforts to mandate public sustainability performance disclosures, additional pressure is placed on financial institutions, investment firms, and their underlying investments to transparently showcase their impact on the environment and society. AssetMetrix and Proof have teamed up to alleviate this pressure through offering an end-to-end SFDR-focused ESG solution. We recently sat down with Shannon Boselli, Director of Business Development at Proof, and Hanne Schnell, ESG Product Manager at AssetMetrix, to discuss this partnership.

How did Proof & AssetMetrix kickstart their partnership discussion?

Shannon: Our teams met at the PE summit in Munich where we discovered that both organizations shared a common goal: to help asset managers & founders streamline & scale their ESG data management, analysis, and reporting workflows. As discussions continued, regulatory bodies in the EU published the first mandatory public disclosure of sustainability performance. This moment was the catalyst for Proof & AssetMetrix to join forces.

What drew AssetMetrix to collaborating with Proof?

Hanne: At AssetMetrix, we have been actively enabling our clients to achieve ESG transparency since 2019. We have continuously developed our ESG solution to keep up with the dynamic nature of the field. Our strong belief in continuous innovation means we are always seeking opportunities to expand our product offering to benefit our clients. In partnering with Proof, we recognized the potential to bring an integrated ESG solution to the private capital market. Our clients are now able to access the ESG and Impact expertise they need as well as fulfilling regulatory requirements, seamlessly integrated with their financial data.

What are the biggest challenges investors are facing in relation to SFDR and how does this joint solution address these challenges?

Shannon: Our combined solution plays a crucial role in both investor and company SFDR readiness and ongoing data management. We offer a robust ESG + impact data management platform that enables investors to seamlessly collect and aggregate performance data. By automating workflows, we streamline the end-to-end process and cut down manual, time-consuming efforts. Moreover, we recognize the importance of supplemental knowledge and support for companies navigating the complexities of SFDR compliance. Proof provides extensive support through our SFDR Knowledge Hub, which is exclusively available for our users to learn more about regulatory developments, ESG & impact market trends, and ultimately how to take effective action to mitigate risks & maximize outperformance.

Hanne: Further, our advanced data processing and management capabilities simplify the process for our clients. Our technology-driven solution automates data processing, ensuring accuracy, consistency, and efficiency. Through our platform, asset managers can seamlessly manage and analyze data, as well as directly share it with their investors, helping them meet regulatory requirements effectively. Finally, the required output is automatically produced, which reduces manual effort, minimizes errors, and enhances efficiency in compliance processes.

Shannon: Firms that do not meet basic compliance requirements now risk falling further behind as regulations intensify in the coming years. In 2023, firms are expected to show improvement in data quality and overall portfolio performance. In future years, investors will increasingly make investment decisions based on both a fund’s SFDR status and a fund’s ability to make material performance improvements over time. Without 2023 data readily available, firms will face an uphill battle in achieving compliance in 2024.

What are the benefits of this partnership for asset managers?

Shannon: Investors and companies are facing increased pressure to showcase their positive social & environmental performance to external stakeholders, driven by regulatory intervention, LP demands, and shifting consumer behavior. Proof brings deep knowledge of the ESG and impact market, coupled with expertise in sustainability compliance needs. We’ve spent the last 4 years building an end-to-end data intelligence platform, which has enabled both investors and companies with their ongoing measurement, reporting, and analytics.

Hanne: At the same time clients benefit from AssetMetrix’ deep understanding of the intricacies of private market operations and our state-of-the-art platform addressing the core needs with technology. AssetMetrix’ capability of integrating various sources of data is integral to provide a comprehensive and unified view of investment information.

This partnership offers a significant advantage by streamlining regulatory reporting requirements and facilitating the integration of ESG, impact, and financial analysis. By leveraging our combined expertise and technologies, clients can access a comprehensive solution that brings together ESG data management, impact measurement, and financial analysis. This integration ensures that sustainability reporting is as important as financial reporting and transparency, enabling more informed decision-making and sustainable value creation.

Looking ahead what will be important for investors in the next couple of years?

Hanne: Understanding your ESG footprint will only become more important – not only due to the developments of the regulatory requirements and the expectations from investors, but due to the impact it can have on long term sustainable value creation. In the coming years, the need for expertise and guidance will remain strong as clients strive to build a valuable data cube that integrates ESG data with financial information. As the complexity and volume of ESG data increase, having the right expertise and technical solution becomes critical for effectively managing, analyzing, and leveraging this data.

Shannon: : Private market investors are waking up to the benefits of social, environmental, & governance screening as a tool to understand a company’s resource efficiency & impact potential prior to making their investment selection. As regulators continue to intensify efforts in building mandatory disclosures of private companies’ ESG performance, financial institutions, investment firms, and their underlying investments will face further pressure to transparently showcase their positive or negative impact on the planet and its inhabitants.

We believe our integrated solution will not only meet the evolving demands of the market but also contribute to the broader goal of sustainable and responsible investing. We are excited about the possibilities that this partnership brings and the positive impact it will have on our clients’ investment practices.

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