S&P Global has announced plans to acquire the environmental social governance (ESG) business of RobecoSAM for an undisclosed sum, in a move aimed at strengthening the credit ratings giant’s expertise in evaluating the sustainability credentials of companies around the world.
Investment specialist RobecoSAM is well known for its widely respected Corporate Sustainability Assessment (CSA), an annual evaluation of corporate sustainability practices which will be taken over by S&P Global as part of the deal.
S&P Global described the CSA, which draws upon 20 years of experience analysing the impact of sustainability on companies’ long-term value creation, as one of the most advanced ESG scoring methodologies in the world.
RobecoSAM’s ESG arm comprises two units, both of which are set to be acquired by S&P Global in the deal, announced late last week and subject to regulatory approval. One administers the CSA for the purpose of issuing ESG ratings, and the other provides in-depth reports to companies seeking to understand their sustainability performance relative to their rivals.
The two firms have an existing partnership stretching back to 1999 when the CSA first was launched by RobecoSAM in collaboration with Dow Jones Indices, a subsidiary of S&P Global. Under the terms of the deal, Robeco and RobecoSAM said they would continue to have access to the CSA data for use in investment strategies and will provide advice on the CSA Methodology.
S&P Global said the acquisition would bolster its position “as the premier resource for essential ESG insights and product solutions” for its customers, opening up access for its clients to datasets analysing over 4,700 companies.
It said the company coverage also was expanding rapidly and would accelerate under S&P Global’s wider ESG efforts.
“Through this acquisition, S&P Global is bringing an additional layer of critical insight to our leading suite of ESG product offerings, which will further enable our customers to create resilient strategies, build a sustainable future and meet the expectations of an evolving market,” said Douglas Peterson, S&P Global’s president and CEO. “Beginning with the launch of the Dow Jones Sustainability Index over 20 years ago, RobecoSAM has been an exceptional partner in our shared commitment to bringing essential ESG intelligence, data and insight to the financial markets.
“Today’s announcement is an exciting next step in the evolution of our partnership that will allow S&P Global to create market differentiating ESG products and deliver new content and capabilities to our customers.”
The acquisition is yet further evidence of the global growth in importance of environmental data across the financial and corporate sustainability world. Earlier this year, rival credit rating giant Moody’s snapped up a majority stake in climate risk data firm Four Twenty Seven in a move hailed as “a big deal” by commentators.
Karin van Baardwijk, vice chair of RobecoSAM’s board of directors, said the deal would allow the firm to focus on its sustainable investing capabilities. “The ESG data landscape is changing rapidly and data providers are evolving along with it,” she said. “S&P Global is best positioned to maintain and build on the leading position of the CSA, which will continue to benefit Robeco, RobecoSAM, and their clients.”
The deal follows Schroders’ announcement Wednesday that it plans to integrate ESG across all its investments by 2020.
The asset management giant’s Sustainability Accreditation, launched in 2017, currently encompasses more than half — $296 billion — of its assets, and plans to reach 100 percent before the end of next year.
“As an active manager, we see sustainable investment as an integral and necessary part of our responsibility,” said Jessica Ground, global head of stewardship at Schroders. “Our clients are increasingly asking for ESG to be embedded into their portfolios and, in turn, we are also constantly seeking to improve how effectively we integrate ESG across Schroders’ investment desks. It is not just a tick-box process.”