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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.

RiskMetrics 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.


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