In a first stage, Quoniam systematic analysis incorporates ESG data from MSCI ESG Research and also incorporate the capabilities from a dedicated ESG team of our parent company, Union Investment , who compiles and validates data from various research providers such as MSCI, Reprisk,Trucost and the world Bank and links them to the capital market data structures of five asset classes.
In a second stage, this data, which covers 32,000 securities, 14,000 issuers, 8000 companies and 104 countries is automatically imported in our data base.
In a third stage a validation process starts. In this stage, after we validate the data quality, we incorporate our in-house research and other external sources e.g. the exclusion list published by the Norwegian government fund.
In a fourth stage, we formally incorporate systematically the ESG/Responsible investment policy of our clients applying either positive/exclusionary lists or ESG factors in the investment process. If the exclusions lists are applied to reduce the individual universe of each fund, then the automated investment process can only choose equities from the reduced fund's universe. Further, these lists are part of the daily investment monitoring process. This includes an analysis of the complete company structure, which reflects corporate actions such as mergers and acquisitions.
In the last stage, the negative, positive and norm-based ESG lists applied in the portfolio management process also feed into the audit system from Princeton (MIG 21). Therefore changes to the lists will lead to passive ESG guideline breaches and trigger appropriate guideline conform actions in portfolio management.