As sustainable finance sophisticates, so has Matter. 2022 held a number of significant product launches, including our new portfolio analysis platform and the release of 'SDG Fundamentals'
In the face of growing scrutiny, sustainable finance is evolving, understanding around the nuances of sustainable investing is growing, and at the same time strategies are sophisticating. Seldom has this been as clear as in 2022, in a year which saw Russia’s invasion of Ukraine expose the flaws in how ESG was understood and implemented, the emergence of an anti-ESG movement in the U.S put even the largest asset managers under pressure, and preparation for the next phase of ground-breaking EU regulation in the shape of SFDR and the EU Taxonomy caused confusion, resulting in a sudden rush to redefine and re-classify investment products towards less ambitious categories.
In the midst of these, however, there are rays of hope. As the limitations of ESG have become increasingly clear, there is growing demand from the industry for clear guidance on what constitutes sustainable investing and how to do it. This has coincided with a growth in the demand for investment products which can demonstrate their sustainability credentials and the impact they create.
In this context, it is imperative that data and analytics providers are innovating to offer the insights necessary to facilitate the realisation of these positive trends, in terms of regulation, continuing to mainstream sustainable investing, and enabling the most ambitious sustainable investors. During 2022, Matter reached several key milestones to help enable sustainable investment which moves beyond ESG, focussing on nuance, accessibility and transparency.
Here is a snapshot of what we were up to in 2022:
In January, we released Matter’s platform for portfolio analysis. The platform helps make sustainability analysis simple, flexible and transparent. In a matter of seconds, investors can analyse the sustainability of portfolios of listed assets across a range of sustainability themes and metrics. The platform model removes the need for complex integration, and instead generates analyses in an accessible and intuitive manner.
Throughout the year, the platform has continued to sophisticate. Users can report on SFDR, understand the SDG alignment of their investments, see portfolio carbon emissions, and access thematic flags from Matter’s wide network of subject matter expert sources, ranging from civil society organisations, think tanks, research institutions and more.
The flexible and customisable platform allows investors to fully explore the nuances of their portfolios. Rather than reducing sustainability to a single number or letter, the platform embraces the complexity of sustainability but delivers the insights in an accessible and easily digestible way.
Click here to learn more about Matter's platform
SDG Fundamentals – understanding the SDG alignment of a company’s products and services
In June, we launched launched SDG Fundamentals, a solution created to understand how revenue streams generated by companies are aligned or misaligned to the targets of the 17 United Nations Sustainable Development Goals (SDGs).
The SDGs are the closest thing humanity has to a universally accepted roadmap for achieving a sustainable future for all, and unlocking the SDGs represents the next frontier for sustainable investment.
SDG Fundamentals represents a crucial step in bridging the data gap surrounding the SDGs. By looking at revenue SDG Fundamentals looks to the core of a company’s impact: the products and services it sells. Updated monthly and covering 55,000 companies, the tool provides investors with a clear picture of how investments interact with the SDGs at the individual SDG, SDG target and aggregate SDG level.
SDG Fundamentals is transparent to its roots, with all data traceable back to a company’s product or service, and can be used for thematic product creation, reporting, sustainability definitions and more.
The team at Matter will continue to sophisticate SDG Fundamentals with an aim to include CAPEX alignment in early 2023.
Click here to learn more about SDG Fundamentals.
In September, we launched an updated version of SDG Signals. SDG Signals is a Machine Learning-driven Natural Language Processing sentiment analysis tool to assess how companies are perceived in light of the 17 United Nations Sustainable Development Goals. SDG Signals analyses over 60,000 articles across more than 38,000 companies, updated daily, to enable investors to monitor the media perception of companies’ sustainability efforts at short notice.
The September update included sentiment breakdown at individual SDG level, allowing for a greater level of nuance in spotting SDG-related risks and opportunities, months before they are reflected in traditional ESG and impact data.
Click here to learn more about SDG Signals
SFDR and EU Taxonomy
Regulatory requirements are at the forefront of data considerations for many investors, with Level 2 of the EU’s Sustainable Finance Disclosure Regulation (SFDR) requiring investors to report on the ‘Principal Adverse Impacts’ (PAIs) of their investments.
On our platform, Matter’s data and insights combined to provide an automated solution to SFDR reporting, ensuring that investors have all the information they need to report on the Principal Adverse Impacts (PAIs) of their investments.
In addition to reporting, users can test various universes, portfolios, or benchmarks and see how each version performs against the different PAIs, as well as other critical metrics for SFDR Article 8 and 9 products. The insights can be used to test the sustainability credentials of a strategy before it is launched or monitor the quality of existing products.
Additionally, an initial EU Taxonomy module was launched on Matter’s platform to help investors navigate the first stages of EU Taxonomy eligibility and alignment exploration.
Click here to learn more about Matter's regulatory solutions
2022 was a year of progress at Matter, with a growing product quite catering for a broader range of potential users, whilst remaining grounded in the principles of transparency, nuance and accountability. The year also brought 7 new colleagues and sophisticated new clients in Europe, the U.S. and Asia. This is just the beginning of the journey, however, and throughout 2023 we will continue to push the boundaries of what is deemed possible in understanding a company’s impact.
We wish you all a great start to the new year, and if you want to follow the journey at Matter, or keep an eye out for new product launches, Sign up for our newsletter below.