Video source: Cowen Inc
Cowen Inc (Nasdaq: COWN ) said it is one of the first major Wall Street investment firms to include an environmental, social and governance (ESG) score in its company equity research reports.
On Monday, the New York-based brokerage said its team of 55 analysts will start using data from third-party ESG specialist Truvalue Labs to provide “company-specific scores” in its equity research.
“ESG factors have become a critical component of the investment process, and there is a distinct need to have a solution set that can address the volume of information involved and standardization needed to have a clear view of corporate progress,” said Cowen’s director of research, Robert Fagin.
According to Cowen, Truvalue Labs, a FactSet company, uses artificial intelligence to assess more than 100,000 sources of information to “provide an indication of how stakeholder issues and potential controversies may affect a company based on real-time information.”
Those data points include industry publications, news outlets, non-governmental organizations, trade unions, legal and regulatory filings and academic publications, Cowen said.
The information is then used to evaluate companies’ performance on a scale of 1 to 100, with 50 being neutral and anything above being positive.
“The new scoring is also deeply reflective of Cowen’s commitment to supporting the global transition to more sustainable assets,” said Fagin, who added that it will help support “impactful, long-term change that can benefit industries and communities.”
Cowen’s announcement comes as the sustainable investing movement continues to gain traction, and investors increasingly hunt for stocks that score well on ESG metrics.
A number of companies such as McDonald’s Corporation, Starbucks Corporation and Chipotle Mexican Grill have recently unveiled initiatives aimed at holding its senior executives accountable for meeting ESG-related goals.
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Source: Equities News
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