Arabesque Adds Eagle to List of ESG Data Users

Arabesque, a quantitative fund specializing in sustainability, has partnered with Eagle Investment Systems to offer access to its environmental, social and governance (ESG) data tool, S-Ray.

The S-Ray sustainability data tool, which Eagle clients can now incorporate into their platforms, applies ESG metrics using 50,000 sources in 15 different languages to monitor thousands of the world’s largest corporations.

Arabesque excludes companies from its portfolios if the metrics give them low sustainability rankings. The shares of some excluded companies, such as Volkswagen and Facebook, suffered in the wake of scandals, sparking the interest of investors and driving demand for ESG data from asset managers, says Andreas Feiner, CEO of Arabesque S-Ray. He adds that the company’s core mission is “getting sustainability into the mainstream” investment process. 

“Arabesque has an interesting approach to ESG because they are both an asset manager and a data provider—in other words, they eat their own cooking,” says Joel Kornblum, head of strategic alliances at Eagle. “In addition to their approach, which uses machine learning and advanced technology, they have decided to offer their data at a very reasonable price.”

Although there are still obstacles to gathering quality ESG data, Feiner says he sees increasing demand for incorporating ESG metrics into investment portfolios.

Kornblum says Eagle clients expressed a need to incorporate ESG filters and that ESG factors are currently part of many of its investors’ investment strategies.

“Integrating sustainability or transparency into investment processes enables better decisions, which is what investors would like to see,” says Feiner. “Also, the financial crisis 10 years ago led to a rethink of how people want companies to act in society.”

He says the market is moving towards an age of transparency in which harmonization of raw data points will be used as a minimum requirement for companies to make sustainable decisions. “The only thing you can do as a company or market participants is to be absolutely open and transparent. Don’t hide anything and you’ll be in a good place,” he says.

Arabesque’s ESG data is also available to Eagle’s parent company, BNY Mellon, as well as FactSet and State Street, among others.