NN Investment Partners (NN IP), the asset management arm of Dutch insurer NN Group, has selected Truvalue Labs to provide key inputs into the firm’s environmental, social and governance (ESG) assessment process.
“We have a systematic process, where we combine datasets that contain price-moving information, like P/E, growth or balance sheet factors,” says Jeff Meys, portfolio manager automated intelligence investing, at NN IP. “Up until we started using Truvalue Labs’ data, it was challenging for the team to include any ESG indicators in our quantitative investment processes because we couldn't find any alpha source in any of the data from traditional data suppliers.”
“Alpha alone isn’t enough – the data needs to be uncorrelated with other factors,” he adds. “After testing Truvalue Labs’ data, we chose two key indicators to use in our process. We use those scores across every industry, and they are a significant percentage of our overall company score.”
Truvalue Labs’ data are also a valuable input to NN IP’s ESG composite score, a single number generated with input from multiple data sources. The data give an indication of how stakeholder issues and potential controversies may affect a company based on real-time information.
“NN IP is a leader in responsible investing,” notes Hendrik Bartel, Truvalue Labs’ CEO. “[We] help firms leverage AI [artificial intelligence] technology to gain new actionable insights as they continue to integrate ESG factors across all holdings and portfolios.”
NN IP, which has 285 billion euros (US$337 billion) in assets under management, has integrated environmental, social and governance (ESG) factors into investment processes since 1990 and is a signatory to the United Nations-supported Principles of Responsible Investment.