Man Group launches proprietary ESG analytics tool

From

Jason Mitchell

Man Group, the global active investment management firm, has announced the launch of Man Group ESG Analytics, a proprietary, dashboard-style tool enabling the firm’s investment teams to monitor non-financial risks and analyse environmental, social and governance (ESG) factors across single issuers, portfolios and indices. The tool, which further enhances Man Group’s responsible investment (‘RI’) capabilities, also features stewardship data, offering a real-time overview of a portfolio’s proxy voting performance and statistics.

Man Group ESG Analytics was developed internally under the direction of Man Group’s Responsible Investment team, with close collaboration between Man Numeric (the firm’s fundamentally-driven, quantitative investment engine) and Man Group’s risk and performance analysis team and stewardship team. The tool is available to all portfolio management teams across Man Group’s investment engines and can be applied across asset classes as well as to both traditional and alternative investment strategies.

The dashboard embeds a proprietary ESG scoring system derived from Man Numeric’s data research. The system applies advanced data science and quantitative analysis to disaggregate multi-vendor ESG datasets, allowing the tool to generate a holistic score for the sustainability profile and impact of a business. Datasets from three leading ESG data providers – Sustainalytics (ESG scoring and controversies data), MSCI (ESG scoring), and Trucost (environmental data) – are also integrated into the platform, allowing portfolio managers to evaluate a wide variety of company-specific ESG metrics. The dashboard provides investment teams with the ability to drill-down into this data at a company, portfolio and index level to further enhance analysis, making it easier to identify potential ESG risks. A built-in alert function with the ability to set limits on changes in individual or benchmark scores also allows portfolio managers to closely monitor and track movements. Finally, the dashboard displays voting activity, reinforcing fund-level engagement and active ownership by Man Group’s investment teams.

Jason Mitchell, Co-Head of Responsible Investment, Man Group, said: “If the old axiom – what’s measurable is manageable – holds, then more sophisticated approaches and advanced analytics are vital in order to identify and understand all the dimensionality that ESG represents. Man Group ESG Analytics represents three important accomplishments for Man Group: first, it helps demystify and organise the complexity of ESG data for our investment teams and clients; second, it allows us to take an innovative approach to ESG reporting in advance of inevitable regulatory and statutory ESG reporting requirements; and lastly, Man Numeric’s development of a proprietary, uncorrelated ESG factor provides a necessary way for us to not only understand, but ultimately to better measure and manage ESG risks.”

Rob Furdak, Co-Chief Investment Officer, Man Numeric, said: “One of the main challenges that both quantitative and discretionary managers face when incorporating RI into their investment processes is that ESG data is messy and subjective. This requires a different approach to understanding the variables than with traditional factors. Man Numeric’s ESG team has undertaken a stringent process to understand the unique qualities of this data and develop a multi-source, industry-based view of ESG. We are excited by the launch of the ESG Analytics tool and the opportunities this presents for us as a firm.”

The development of the ESG Analytics tool follows the introduction of Man Group’s RI Fund Framework, a formalised structure that quantifies the degree of RI focus for all Man Group funds; and the Man Group RI Exclusions List, a proprietary list of sectors and companies ineligible for the firm’s portfolios.

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