SimCorp, the provider of investment management solutions, announces the integration of Clarity AI’s data offering into its investment management platform.
This partnership with Clarity AI, the global sustainability technology company, provides institutional investors with access to AI-powered datasets allowing them to effectively align with the EU sustainable finance regulations and execute on impact investing strategies.
The European Union is at the forefront of sustainable finance, with 20 percent of the region's fund assets classified as sustainable. Additionally, the EU accounts for 83 percent of global assets invested in sustainable funds, according to the 2022 Global Sustainable Fund Flows report.
Despite stringent regulations like the Sustainable Finance Disclosure Regulation (SFDR) and the EU Taxonomy designed to combat greenwashing and ensure greater transparency, challenges around data availability, reliability, and comparability persist. These challenges put institutional investors at risk of using inaccurate or outdated company evaluations, thereby exposing them to potential reputational and investment risks.
“Amid the rapid evolution and diversification of regulatory frameworks and increasing demand for access to high quality, accurate, timely sustainability data, Clarity AI stands out by delivering a flexible, and scalable solution. Our approach is comprehensive, providing the required data, methodologies, and tools to comply with all regulatory requirements,” said David Silver, Head of Solutions at Clarity AI.
“We are thrilled to partner with SimCorp to expand the use of reliable, accurate data to meet regulatory requirements and drive more capital into sustainable finance without adding unnecessary complexity.”
“With Clarity AI’s data seamlessly integrated into SimCorp’s investment management platform, sustainability analysis becomes an integral part of the complete end-to-end investment process. Our mutual clients benefit from advanced process automation, rigorous control checks of their sustainability-related policies, and effortless access to ESG analytics,” said Carl Balslev Clausen, Director and Head of ESG Product Management at SimCorp.
Clarity AI’s award-winning solutions for SFDR and EU Taxonomy are based on methodologies built from the ground up, that leverage advanced technology to streamline data collection and processing and reduce errors associated with manual work.
“Through the use of AI-powered reliability checks, trained and supervised by a global team of data science and sustainability experts, we ensure our data is of the highest quality and consistent throughout all areas of sustainability, such as regulatory compliance or impact measurement,” said Silver.
The adoption of the United Nations Sustainable Development Goals (SDGs) framework has become a crucial tool to report on impact, develop engagement strategies, or create new revenue opportunities through thematic funds, for example.
A recent survey by BNP Paribas Asset Management found that more than 50 percent of investors are currently using or are planning to use thematic investing, and 70 percent of thematic investors plan to increase their focus over the next three years. In Europe, one of the main drivers of this trend is being able to market products as Article 8 or Article 9 under SFDR.
To meet this growing demand, SimCorp’s investment management platform offers its users Clarity AI's SDGs dataset with the ability to customize scores based on intended sustainability outcomes. Clarity AI analyzes more than 70,000 companies, 420,000 funds, 201 countries, and 199 local governments, which represents more breadth than any other player in the market.
"Institutional investors are increasingly prioritizing their ability to accurately measure and oversee the societal effects of their investments. Aligning with the SDGs has now become an established norm within the industry. Clarity AI's extensive SDG dataset brings a high level of completeness, and we are thrilled to seamlessly integrate it into our ESG and sustainable investment solutions. This integration offers SimCorp clients effortless access to top-quality data, further enhancing their investment decisions,” said Balslev Clausen.