Citi has developed new visualisation tools to examine several sustainability measures provided on a daily basis by Arabesque S-Ray, a global data provider that uses an algorithmic methodology to measure ESG performance.
ESG scores will be incorporated into its securities services platform, Citi VelocitySM Clarity, providing clients with the capability to assess sustainability risk at the portfolio and security level.
CitiVelocity Clarity is the data services platform for the bank’s securities services division, which gives clients access to custody, accounting, and securities lending, as well as performance analytics within a big data infrastructure.
“As new guidelines and taxonomies are issued around the world and new regulations like Modern Day slavery come into effect, investors need more than the traditional data sets they have today,” Swaminath Nagarajan, Citi’s Apac head of investment analytics and ESG, securities services, told FSA.
“They need to look deeper into their portfolios and understand exposure to various factors such as human rights, labour rights, diversity and emissions. Such information is useful across the front, middle and back office as awareness of ESG and climate risk permeates all parts of the investment process,” he said.
METHODOLOGY
Arabesque S-Ray processes about 150 million data points daily from 3,000 sources of NGO and news signals covering around 7300 public companies throughout the world to assign company ESG scores, according to Nagarajan.
Citi’s platform combines these scores with client holdings on a daily basis to compute portfolio level scores and exposures. Furthermore, Citi’s big data platform also uses open architecture which would support the addition of new data sources, he said.
Clients can access the ESG data using interactive dashboards, and click on each widget to drill down into the portfolio.
For example, clients could click on Australia and finance to compare ESG scores of companies within the Australian finance sector. Using other dashboards, they can review security level information.
They can also access daily underlying scores, customise the dashboard, and download the data in excel format directly from CitiVelocity Clarity.
“This gives complete flexibility to clients in terms of the different ways in which they want to consume the information and perform further analysis,” said Nagarajan.
The Arabesque universe covers 90% of global market cap; it also includes emerging markets and corporate bonds.
“The ability to understand ESG exposure has become imperative across the entire industry as investors, advisors and regulators are increasingly asking for transparency from asset managers and asset owners,” said Fiona Horsewill, global head of data for Citi Securities Services.
“With this latest addition to CitiVelocity Clarity, we offer our clients the ability to understand their ESG exposures inherent within their portfolios and report on their investments from a sustainability perspective.”
A few months ago, Citi announced the launch of its Citi ESG World Indices, comprised of best-in-class ESG performers from across the global markets, based on Arabesque’s ratings.
The bank plans to work with clients to develop the scope and functionality available through Citi Velocity Clarity, including incorporating additional ESG data from other providers.
Citi recently enhanced the platform’s universe of available data, reporting capabilities and application programming interface (API) function.
Citi Securities Services has around $24.9trn of assets under custody and administration, according to the bank.
