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FactSet to acquire ESG provider Truvalue Labs

The transaction, expected to close later this year, is latest in ESG data house consolidation trend

Financial data provider FactSet is to acquire US-based ESG and AI specialist Truvalue Labs for an undisclosed fee. 

Truvalue Labs uses AI technology to provide daily “signals” that identify positive and negative ESG behaviour for some 19,000 companies by scanning more than 100,000 text sources. The signals are then mapped against Sustainability Accounting Standards Board (SASB) standards and the Sustainable Development Goals.  

The terms of the deal are undisclosed, but the transaction is expected to close later this year.

Truvalue Labs was founded in 2013 and last year appointed MSCI’s former Head of ESG Indices, Tom Kuh, as its Head of Index. It has formed a number of significant partnerships in recent months, with Citi announcing its Research & Global Insights Group would use Truvalue Labs data to monitor public company performance and NN Investment Partners announcing it would use its data in its in-house ESG assessment process. The Test of Corporate Purpose – a new initiative led by Hiro Mizuno, ex- CIO at Japan’s government pension fund, Sacha Sadan, Director of Investment Stewardship at Legal & General Investment Management, and Oxford academic Robert Eccles – uses Truvalue Labs data; and European index provider Solactive is also working with the firm on new ESG indices. 

FactSet’s CEO Phil Snow said: “Truvalue Labs provides detailed and actionable ESG scores backed by a credible body of academics. Combining Truvalue Labs’ offering with FactSet’s content and technology suite will add value across our businesses. We believe this acquisition will yield compelling results for both firms and our joint client bases.”

Truvalue Labs joined the Open:FactSet Marketplace two years ago, meaning its data is already integrated for use with current FactSet content and products. 

It’s the latest example of a trend over recent years of data providers buying up ESG specialist outfits to expand their sustainability offerings through mergers. Morningstar upped its stake in ESG data provider Sustainalytics in April this year, and in 2019, Moody's acquired Vigeo Eiris, Four Twenty Seven and a minority stake in SynTao Green Finance. The London Stock Exchange acquired ESG data provider Beyond Ratings in June last year, and Institutional Shareholder Services (ISS) has purchased four separate ESG data and research providers since 2015. MSCI and S&P Global, too, have each made several ESG-related purchases.