Conventional investment strategies that take corporate ESG performance into account.
Regulation is hard.
Some investors are taking it on.
Alternative to Policy Intervention
Command and control regulation
Economic Model for Regulating Businesses
Business activities may have externalities, harms that are not accounted for in the price.
Standard Interventions Are Always Inefficient
Planner can never know price, quantity, or solution
Curves change constantly over time
Still need engagement with corporate leadership
Machine learning to get information from data
Natural language processing to get information from text
Investors Evaluate Companies Anyway
Data infrastructure is a fixed cost that investors already pay.
Most investors have incentives to reduce systemic risk.
ESG data would also help implement standard interventions.
TruValue Labs Provides ESG Data
I work at TruValue Labs, a startup that provides rich streams of ESG data to investors. We use natural language processing to extract relevant ESG information from text. Right now most of the text is from news media and industry publications, but there are also some legal statements and articles from government compliance agencies.
In addition to qualitative data, we collect quantitative and structured data from government databases and ratings agencies. Not that many of this data is currently in the app, but it will be soon!
The app is now available to investors through the Thomson Reuters Eikon terminal!