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CALVERT RESEARCH & MANAGEMENT UNCOVERS HIDDEN INSIGHTS WITH TRUVALUE LABS' DATA AND ANALYTICS

Calvert Research & Management leverages Truvalue Labs’ data and analytics to spot trends, identify emerging ESG issues, and conduct research on companies with limited public disclosure.

Firm Type

Investment advisor

The Challenge

Analyzing, evaluating, and connecting disparate ESG information from a wide variety of sources

Solution

Data and analytics to better understand corporate performance on ESG issues, particularly from sources that provide insight beyond corporate disclosure and reporting

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The Challenge

With roots in responsible investing dating back to 1982, Calvert Research and Management is a global leader in the field. “Calvert is a well-known name because responsible investing is the core of what we do,” says Vice President and Senior Research Analyst Daniel Rourke. “That’s something we’re very proud of.”

Today, Calvert seeks to generate favorable investment returns for clients by allocating capital consistent with environmental, social, and governance (ESG) best practices and through structured engagement with portfolio companies. “We look at ESG factors we believe are financially material to a company’s operations and performance,” explains Services Sector Research Analyst Imani Camp. “I am focused on certain issues—such as a company’s ability to attract and retain a talented workforce—that can have an impact on the value of a company in the industry over the medium and long term.”

Understanding how a company manages its ESG risks and opportunities requires analyzing and evaluating information from a wide variety of sources, including corporate disclosures, third-party rating agencies, and news services. “There’s a lot of critical thinking involved,” Rourke points out. “We have to connect disparate information and make principled judgments about how companies are managing their impact on the shared environment and civil society. One of the central questions for our research is: How might ESG factors influence a company’s financial performance?”

The Solution

To add to its analyses, Calvert was an early adopter of data and analytics from Truvalue Labs, a FactSet company. Truvalue Labs was the first to provide ESG analytics based on the Sustainability Accounting Standards Board (SASB™) Materiality Framework of 30 indicators. The company was also among the first to apply natural language processing (NLP) and artificial intelligence (AI) to glean insights from enormous volumes of unstructured data from thousands of sources—news and trade media, regulatory filings, government agencies, non-governmental organizations (NGOs), and more. Powerful algorithms process that data in milliseconds to score companies on ESG factors in real time as events occur. The platform also provides ESG Momentum scoring so analysts can quickly evaluate a company’s trajectory—whether it is improving or declining on ESG metrics.

Truvalue Labs has become a helpful tool in Calvert’s research arsenal. “Spotlight solves some significant challenges that research analysts face,” said Rourke. “On any given day, there is a flood of information in the market on the companies that I cover. Seeing the most material, relevant ESG events on a timeline makes it easier to digest the information, spot trends, and evaluate whether a company is responding in a way that is likely to create value for longer-term investors like Calvert.”

“We are continually looking for innovative ways to identify emerging ESG issues,” explains Quantitative Research Analyst Yijia Chen. “The way that Truvalue Labs provides up-to-date signals on material issues, and the direction in which those signals are moving is a powerful insight. We appreciate the timeliness of the information, particularly when comparing a company with its peers.”

For Rourke, the platform was also helpful in conducting research on private companies. “I was reviewing a private company and started with a standard pitch deck and some deal-related documents. I wanted to better understand the market sentiment on the company related to material ESG issues. I did a web search and didn’t find anything particularly current or useful. When I did a similar search with Truvalue Labs, the second article I found had the type of ESG-related information that I was looking for. That is when I realized the value of the platform for research on companies with limited public disclosure.”

The Results

Camp cites the utility of Truvalue Labs at a time when companies are in the news over controversies. “Just to be able to clearly see the sheer volume of attention that a firm or an issue is getting in real time is helpful contextually,” she says. “That’s something that’s typically not easy to capture and I think the platform does that in a way that is intuitive for researchers.”

Calvert has also seen the benefits of having an ongoing dialogue with the people who are running and building Truvalue Labs. “I like that the product is continually evolving based on feedback from users,” says Rourke. “That type of product development can add real value. The team is readily available to talk and engage.”

Camp concurs. “The company-level research briefs published by Truvalue Labs provide helpful thought leadership on ESG integration with fundamental research.” Chen adds, “Across the market, investors are trying to understand how to integrate ESG analysis and investment decisions. The methodology employed on Truvalue Labs data and analytics is transparent and consistent, which is valuable for quantitative researchers.”

 

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