Dive Brief:
- ISS Sustainability Solutions — the sustainable investing arm of an Institutional Shareholder Services subsidiary — has acquired geospatial risk modeling firm Sust Global for an undisclosed price, the companies announced Tuesday.
- Sust Global’s founders Josh Gilbert and Gopal Erinjippurath said in an accompanying Aug. 5 note that the acquisition will allow the company to “rapidly” scale its product and enable more investors to understand risks to physical assets.
- The deal will give clients of the ISS Stoxx subsidiary access to an artificial intelligence-enhanced geospatial modeling engine, allowing them to receive material climate- and nature-related physical risk insights on portfolio companies, ISS’ release said.
Dive Insight:
The acquisition expands the suite of physical climate risk assessment tools available to clients of the sustainable investing business of ISS Stoxx, a subsidiary of global corporate governance and proxy advisory service Institutional Shareholder Services. Sust Global’s products deliver “globally consistent analytics on climate hazards and financial materiality across multiple scenarios,” the company’s founders said.
ISS Stoxx Head of Sustainability Business Till Jung said the acquired products “are a highly complementary fit” with the firm’s existing proprietary asset data.
“Institutional investors’ need for geospatial data and enhanced physical risk analytics is growing rapidly and we're pleased to address that demand through this transaction,” Jung said in the release. “Our ability to map them to corporates and investment portfolios will result in highly effective solutions for institutional clients."
Sust Global, founded in 2020, counts global investors and financial institutions among its client base and existing customers will continue to receive support, according to the company’s Aug. 5 note. The company’s founders said in the note that it is “now positioned to make an even greater impact on how the world's leading investors understand, quantify and manage emerging real asset risks.”
“In 2020, we identified a clear gap between climate risk expertise and the workflows used for sustainability reporting and quantitative finance,” Sust Global’s founders said. “Integrating climate-risk metrics into day-to-day operations across varied functions in capital markets was inconsistent and often complex.”
ISS Stoxx quietly renamed its sustainable investing arm this year. After ISS ESG signed German securities services provider DekaBank as an ESG data client in May, ISS Sustainability Solutions launched the firm’s first sovereign nation investor climate impact report in July. The firm’s sustainable investing business also announced in April that it would begin rating green, social and sustainability bonds.
