February 20, 2009
Riskmetrics to Acquire Innovest
by Robert Kropp
RiskMetrics cites expansion of research on environmental, social, and strategic governance issues
as major reason for purchase.
RiskMetrics Group, a provider of risk
management and corporate governance products and services to the global financial markets, has
announced that it will purchase Innovest
Strategic Value Advisors, a New York-based corporate sustainability investment research firm.
The acquisition is expected to close on March 2, 2009.
According to Stephen Harvey,
head of governance at RiskMetrics, Innovest's quantitative approach to assessing environmental,
social, and strategic governance (ESG) issues helps investors view intangible, compliance-oriented
issues more clearly.
Innovest applies a detailed analysis of extra-financial
best-practices in its research which offers portfolio diversity as well as an activities screen
which evaluates company involvement in 15 activities typically screened by many
socially-responsible investors, such as tobacco, alcohol, and weapons.
produces sustainability risk reports that help institutional investors and investment managers
determine which companies have comparative best practice in each of the four pillars of
RiskMetrics' research model. The four pillars examined are climate change, other environmental
issues, labor and human rights, and ethics.
RiskMetrics currently provides ESG research to
more than 350 global institutions, and the addition of Innovest's ESG analyst team of more than 50
research professionals will help investors make more informed decisions.
Because it is
expected that after years of inaction under the Bush administration the Environmental Protection
Agency (EPA) will formulate a carbon emissions trading scheme, the merger of two established firms
with expertise in the fields of climate governance and carbon finance should be of particular
interest to socially responsible investors.