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ERM’s ESG Fusion Kicks Off Battle To Serve Investors’ Private Sector ESG Needs

Sustainability consulting firm, ERM, has launched an on-demand ESG ratings platform for the private market. Headquartered in London, ERM employs over 6,000 people in more than 160 offices across 40 countries. ERM’s newly developed ESG Fusion solution is primarily aimed at private credit funds and hedge funds, providing a route for investors to acquire AI-enabled ESG data and insights on privately owned firms within a 48-hour turnaround. The solution utilizes advanced analytics of information from ESG data providers and web-crawlers, in conjunction with established in-house expertise developed through many years of providing transaction advisory services.

Investors in the private sector have long grappled with a critical ESG data challenge - private firms provide inconsistent ESG disclosures or none at all. This is largely due to the fact ESG disclosure requirements globally have focused on large public corporates, with a significant lag in mandatory ESG disclosure requirements for private firms. ERM’s ESG Fusion solution intends to meet investor requirements – helping investors in a variety of time-sensitive investment processes, including ESG due diligence and the benchmarking of a plethora of firms’ ESG performance across and within multiple industries.

External resources are increasingly being utilized to solve the significant challenges posed by ESG integration in the investment process - the extent of this is demonstrated by Verdantix analysis forecasting spend on ‘ESG advisory for investors’ with a CAGR of 17% between 2022 and 2027. As investors continue to seek investor-grade ESG data for private firms, the opportunity falls to ESG & Sustainability consultancies and ESG financial markets solutions providers to address this substantial data challenge. The introduction of ERM’s ESG Fusion is a key first move in the market, and we anticipate competitive solutions will follow over the coming years.

ESG ERMs ESG Fusion Kicks Off Battle To Serve Investors Private Sector ESG Needs

Sam Renshaw

Industry Analyst, Verdantix
Verdantix

Sam is an Industry Analyst in the ESG & Sustainability practice. His current research agenda focuses on ESG solutions across financial markets including ESG information providers and sustainability consulting. Sam joined Verdantix in 2021, and previously worked at Moody’s Analytics as part of the Buy-Side Solutions team. He holds a BSc from The University of Nottingham in Economics and is a CFA Level 2 candidate.