Technology partners

FINBOURNE Technology Partners on DEI Data with Denominator

FINBOURNE Technology announces a new partnership with global diversity, equity and inclusion (DEI) data and scoring provider, Denominator. The partnership aims to closely support the global Buy Side as it responds to growing demands for DEI transparency, amid a new generation of value-oriented investors.

The integration of Denominator’s unique dataset is a timely addition to FINBOURNE’s flagship investment management platform, LUSID, following an announcement of the Principles for Responsible Investment (PRI) earlier this year. The UN-backed Network of Institutional Investors, with combined assets under management of $130 trillion, called on signatories to apply the DEI statement across investment holdings and the supply chain , and should trigger increased scrutiny from regulators around the world.

The combination of heightened investor and regulatory expectations, including the most recent DEI policy consultation from the UK’s Financial Conduct Authority (FCA)*, increases the buy-side’s need for a holistic view and granularity of DEI performance of portfolio companies. Given the number of aggregated ESG ratings and methodologies on the market, the detailed analysis and interpretation of DEI data has now become a complex and highly manual task for many asset managers, often leading to a focus on gender at board level.

FINBOURNE and Denominator seek to turn this challenge into an investment opportunity, make decisions based on facts, improve transparency and accountability to end investors and ultimately close the global DEI gap through to positive engagement.

Create an investable universe using the broadest range of DEI metrics on the market

Through the integration, FINBOURNE customers can seamlessly access Denominator’s dataset with DEI data and scores from over 15,000 public companies and over 1.5 million private companies. Drawing on internationally recognized frameworks, including the UN Global Compact’s Sustainable Development Goals and the World Economic Forum’s Gender Parity, Denominator offers the most comprehensive dataset of its kind.

With more than 250 unique DEI variables on more than 15 dimensions (gender, race, age, nationality, education, sexuality, disability, health…), asset managers can create and manage an informed investment universe, with the possibility extra to note and forecast portfolios. This not only includes popular variables, for example the percentage of women and ethnic minorities on the board and executive-level employees, but also more unique metrics, such as cognitive diversity, e.g. educational diversity of board members and senior management.

Strengthen trust and transparency for end investors

Integrating DEI data directly into investment operations assures asset managers and end investors that funds are accurately monitored and reported against prescribed outcomes. It also allows progress to be tracked over time, in a specific attribute or across the portfolio, to make more informed investment decisions and to report both internally and externally. Additionally, companies can visualize raw data as well as final scores, choosing between Denominator’s proprietary logic or adding their own methodology to create their “secret sauce.”

Offer competitive investment strategies and products

The partnership aims to expand DEI’s footprint in the global investment community, help address current data challenges and, most importantly, promote the investment opportunities that can be learned from the diverse data set. by Denominator. By leveraging new and competitive capabilities, asset managers can launch new ESG funds and products with a DEI-specific mandate and reach untapped markets, such as the recent phenomenon of female investment platforms.

Anders Rodenberg, CEO of Denominator commented: “We are really excited about this partnership with FINBOURNE Technology. Integrating our comprehensive diversity, equity and inclusion data will enable the global buy side to leverage new, personalized investment strategies that will appeal to investors and deliver competitive advantage. As with the E in ESG, we aim to shift the dial for this essential social element of ESG, from negative screening and best efforts reporting, to driving positive engagement with global companies and making DEI an active priority for global business and society”.

Matthew Luff, Head of Partnerships at FINBOURNE Technology adds, “Partnering with Denominator empowers our clients with quality data to create and manage an exciting new range of portfolios, aimed at previously underserved segments of the population. Unlike measures such as emissions which are more difficult to conceptualize, we are all able to look around our workplaces and see diversity, or lack thereof. Our close partnership with Denominator provides our clients with actionable data and insights to invest in companies that are showing strong returns, alongside a true commitment to DEI values.

Source: FINBOURNE Technology