Historically, evaluating investments focused solely on financial returns. However, with the growing significance of climate change, the concept of “triple bottom line” or financial, environmental, and social impact has been gaining traction. This push to look at investment decisions more holistically has given rise to ESG (Environmental, Social, and Governance) practices and policy.
ESG measures the societal and sustainability impact of every business activity. Investors are now looking to responsibly invest in companies that manage their impact on the environment and society at large. To serve this need of investors.
ESG rating agencies use analysts to measure the performance of various companies and compare them through ratings and rankings, this does not always show the full picture as the rankings can sometimes be as old as 6-12 months.
ESG Analytics is a platform that uses artificial intelligence and alternative data (data outside of corporate disclosures) to benchmark company ESG performance, this allows for more company coverage, real time insights and the ability to look beyond a score to determine whether a company meets the ESG criteria you are looking for.
We took a look at the Financials industry, to understand the best performers. Read on to learn how industry leaders like Akamai Technologies Inc, Synopsis Inc, Keysight Technologies Inc, ServiceNow Inc, Fiserv Inc, demonstrate a well managed company, with low ESG controversy risk.
How were these companies selected?
Each day, ESG Analytics processes millions of documents to identify and manage ESG risk using our proprietary Natural Language Processing (NLP) algorithms. Once we identify a material event, we classify it according to the industry leading SASB framework (26 different ESG topics) and then run sentiment analysis to determine how positive of negative the event is. This chart below shows the ESG Pulse of companies in the Health Care sector. For accuracy, we excluded companies that did not meet a minimum threshold of events.
Here is the full list:
1. Akamai Technologies Inc
Akamai Technologies, Inc. provides cloud services for delivering, optimizing, and securing content and business applications over the Internet in the United States and internationally. It provides cloud security solutions, including Web Application Protector to safeguard Web assets from Web application and distributed denial of service; Kona Site Defender, a cloud security solution; Bot Manager to identify bots and categorize bots based on business or IT impact; Fast DNS, which translates human-readable domain names into numerical IP addresses; Prolexic Routed to protect Web- and IP-based applications; and Client Reputation that assigns risk scores to malicious IP address and enables customers to take action on individual clients.
Akamai Technologies Inc has an ESG Pulse of 0.98 out of 1, and is not included in any negative screens.
Over the last year, Akamai Technologies has been named to Environmental, Social and Governance Stock Indexes.
2. Synopsys, Inc
Synopsys, Inc. provides electronic design automation software products used to design and test integrated circuits. It offers Fusion Design Platform, a digital design implementation solution; Verification Continuum Platform that provides virtual prototyping, static and formal verification, simulation, emulation, field-programmable gate array (FPGA)-based prototyping, and debug solutions; and FPGA design products that are programmed to perform specific functions.
Synopsis Inc has an ESG Pulse of 0.99 out of 1, and has no material ESG controversies of note.
There is virtually no identifiable controversy risk for the company, and this is echoed by other external providers with a score of 14 from Sustainalytics and a BBB from MSCI.
3. Keysight Technologies Inc
Keysight Technologies, Inc. provides electronic design and test solutions to commercial communications, networking, aerospace, defense and government, automotive, energy, semiconductor, electronic, and education industries in the Americas, Europe, and the Asia Pacific regions. Its Communications Solutions Group segment provides electronic design automation (EDA) software; and radio frequency and microwave test instruments; oscilloscopes, logic and serial protocol analyzers, logic-signal sources, arbitrary waveform generators, and bit error rate testers; optical modulation analyzers, optical component analyzers, optical power meters, and optical laser source solutions; and repair, calibration, and consulting services, as well as resells refurbished used Keysight equipment.
Keysight Technologies Inc has an ESG Pulse of 0.99 out of 1, and has a low amount of controversies.
Over the last year, Keysight Technologies was ranked 32nd on Fast Company's Third Annual List of the 100 Best Workplaces for Innovators.
4. ServiceNow Inc
ServiceNow, Inc. provides enterprise cloud computing solutions that defines, structures, consolidates, manages, and automates services for enterprises worldwide. The company offers information technology (IT) service management applications; and digital workflow products for customer service, human resources, security operations, integrated risk management, and other enterprise departments. It operates the Now platform that offers workflow automation, electronic service catalogs and portals, configuration management systems, data benchmarking, performance analytics, encryption, and collaboration and development tools.
ServiceNow Inc has an ESG Pulse is 0.96 out of 1 over the last year, a standout performer using ESG Analytics AI based methodology.
Some initiatives over the last year include:
- ServiceNow and Uber for Business Partner to Enable a Safer Commute to Work - Yahoo Finance
- ServiceNow Delivers New Levels of Business Agility and Resilience for the COVID Economy
- ServiceNow Introduces New Version of the Now Platform, Giving Businesses Must-Have Digital Tools to Workflow Disruptive Change
5. Fiserv, Inc
Fiserv, Inc., together with its subsidiaries, provides financial services technology worldwide. Its First Data segment provides merchant acquiring, e-commerce, mobile commerce, and other business solutions; credit card and loan account processing, commercial payments, customer communications, plastics solutions, customer service, and other products; and various network solutions and security, and risk and fraud management solutions.
Fiserv Inc's ESG Pulse is 0.96 out of 1 over the last year, indicating a well managed public profile, free of ESG controversy.
Over the last year, five credit unions expand relationships with Fiserv to support growth and meet changing member needs.