The inevitability of financial markets embracing ESG
Datamaran introduces Rodney Fernandes - Managing Director Financial Institutions
29 January 2020
If you are working in the financial services sector and you have not come across ESG in the last year, you were probably taking a sabbatical (and not reading any newspapers). Investors are demanding better data to ensure better investment decision-making and have been busy creating all sorts of new products. It’s gotten to the point where mainstream media is referring to this phenomenon as an “ESG explosion”. So, if you don’t know what this is all about.. just Google it.
Against this backdrop, we are incredibly excited to introduce Rodney Fernandes, who joins Datamaran as Managing Director Financial Institutions. (Biography below).
ESG in the financial sector is booming business. Rodney, what is going on?
If I were to choose a slogan to explain the increased focus on ESG issues, it would be: the market wants it. Beyond slogans though, it is a fact that investors are increasingly calling for more consistent and concise material ESG disclosure from companies.
Consider for example Larry Fink’s annual letter to CEOs, in which he asks the companies that Blackrock invests in to publish disclosures in line with both the SASB guidelines and the TCFD recommendations. As the largest asset manager in the world, Blackrock‘s declarations ensure due attention is paid, but it’s far more widespread than people might think. Key market influencers who control substantial assets are crucial in shaping the agenda here – the big sovereign wealth funds for example and also pension funds that need to ensure they are addressing the concerns of their members through their portfolio holdings and strategies. This is then reflected through buy and sell side product providers where every conversation I’ve had for the last little while has involved a discussion around ESG and related themes. So, when I began my discussions with the Datamaran team, I wanted to get a good feel as to how their innovative approach could work in terms of the financial services community.The recent scandals like former Vale CEO charged with homicide over a dam disaster, and of course prior to that Dieselgate and others have painted a clear picture even for the most sceptical. You don’t want your companies to be exposed to such legal and reputational scandals - let alone invest in businesses that are not ensuring they can be around in the long run. Beyond, it’s a massive business opportunity now to be able to pick the innovators.
What type of questions do investors need to ask (and are not yet?) when engaging with companies on ESG?
This is something that needs serious attention. They’ll typically look for information that reminds them of financial performance data. ESG is a different animal though - more qualitative, more strategic, more forward-looking. It should be. The “holy grail” is to truly understand if a company is really doing something about ESG, understand which issues really matter most (“materiality”) and then have effective programs in place. You typically don’t get that information from a single KPI.
I came across an interesting piece on the topic this week and as Prof. Carol Adams pointed out in the Financial Times“ not everything can be reduced to numbers”. Especially as it pertains to ESG, narrative is critical.
There are many challenges in the ESG ratings world, mainly around data availability and data quality. Investors complain the data is not comparable, not robust, too subjective, not trustworthy - the list goes on. Datamaran to me is one of the best kept secrets out there as they’ve been working with companies directly - meanwhile building this hugely impressive data engine. When visiting the team in Valencia, I realised how much computing and data power (not to mention brain power!) this company has. I had an “all access” pass to the exceptional team there, led by Jerome, and this opportunity to look “under the hood” convinced me that I really wanted to work here.
I would really like this interview to trigger some creative thinking and for people to reach out to me directly in order to explore potential areas of collaboration in harnessing our powerful data sets. Armed with the hugely impressive and granular NLP taxonomy that’s been built, the way it can be deployed across literally any source - and the flexibility it provides, I am tremendously excited to brainstorm with clients and potential clients and help to deliver powerful and flexible solutions.
That’s exciting Rodney, do you feel you can already touch upon a few use cases you see?
First, let me start off by saying that given that the diversity of wants and needs, our ability to offer customized solutions in a timely manner is crucial. This is not a one-size-fits-all arena.
Second, another aspect that is important for financial institutions is the independence of the provider. Datamaran is the market leader in the corporate space, with a track record of five years of proprietary analytics and software development. The company has been standing on its own feet since day one - and has proven to be a reliable partner with a clear mandate.
Following on from the above, it is my view (and thankfully a view shared by the co-founders!), that the next logical step for Datamaran is to expand into the investors’ space.
The analytics platform offers unique insights, the ontologies are incredibly granular and dynamic, and the combination of sources analysed is unique. There is immediate application of the materiality app for investors, immediate application of the benchmarking data for portfolio analysis, and huge potential for bespoke product creation.
I’m really excited to join Datamaran at this next stage of its evolution and cannot wait to engage with clients as to how we can help them achieve their objectives.
Rodney Fernandes Biography
Rodney Fernandes is Managing Director of Financial Institutions at Datamaran.
In his role, he is responsible for engaging with the key stakeholders in the financial arena (asset owners, consultants, asset managers, product providers etc) to promote the Datamaran offering and approach and to work with clients to utilize these data sets (customising as appropriate) within their investment processes, decision-making, portfolios and product creation.
Prior to joining Datamaran, Rodney was Managing Director, Client Coverage (EMEA & India at S&P Dow Jones Indices, where he was leading on business development, sales and ongoing client relationship management across EMEA & India.
Rodney has more than 20 years experience within the asset management industry, including Morgan Grenfell / Deutsche Asset Management and Northern Trust as European Head of Quantitative Portfolio Management. He also has knowledge of passive equity and fixed income portfolios, as well as Enhanced Index funds. His previous roles also included derivatives dealing and transition management.
See how Datamaran can help you
Trusted by blue-chip companies, Datamaran is the market leader in external risk management and the only software in the world that supports a data-driven business process for monitoring external risks and opportunities. In house - at any time.
Datamaran enables a fully automated and digitized approach to monitoring emerging and ESG issues, tailored to your business and value chain. It offers real-time analytics on strategic, regulatory and reputational risks to strengthen decision-making - with the power of AI and Big Data.
Fill the form on the right to get your complimentary demo of Datamaran.
“Data-driven materiality helps us to take better strategic decisions.”
Antoni Ballabriga, Global Head of Responsible Business, BBVA