London Stock Exchange Group (LSEG) has acquired Paris-based Beyond Ratings, a provider of environmental, social and governance (ESG) data for fixed income investors.
The acquisition aims to enhance FTSE Russell’s ESG index and data offering.
The acquisition is part of LSEG’s strategy to enhance its Information Services business, a major earnings generator for the group, which includes top tier index provider FTSE Russell.
LSEG plans to leverage Beyond Ratings’ risk models and sustainability data on over 10,000 companies to incorporate ESG criteria into its credit risk analysis for both fixed income and multi-asset indices.
The ESG ratings provider sits nicely alongside FTSE Russell, which itself was bolstered by the recent purchase of the highly regarded fixed income indexing and analytics franchise of investment bank Citi.
The combination of this extensive fixed income capability with Beyond Rating’s ESG competence puts FTSE Russell in prime position to benefit from the growth of ESG mandates within the fixed income space, including in ETFs
FTSE Russell is already an important player in the market for ESG ETFs thanks to its partnership with ETF giant Vanguard – its indices underlie the $420 million Vanguard ESG US Stock ETF (ESGV US) and the $270m Vanguard ESG International Stock ETF (VSGX US) – but it is nonetheless some way behind arch rival MSCI, in terms of ESG-linked equity ETF assets.
LSEG will no doubt be hoping this latest acquisition gives it a chance to shine in the next wave of ESG product development which is almost certainly is going to be within the fixed income asset class.
Waqas Samad, Group Director of Information Services, LSEG, said, “The acquisition of Beyond Ratings will accelerate London Stock Exchange Group’s ability to deliver research-driven multi-asset solutions in sustainable finance investing to our global client base.
“Beyond Ratings has a number of highly regarded ESG data models developed by a strong team of ESG specialists. We very much look forward to working with the team at Beyond Ratings to deliver exciting and differentiated solutions for our clients over the coming months.”
Rodolphe Bocquet, CEO and co-Founder of Beyond Ratings, added, “Beyond Ratings is delighted to be joining London Stock Exchange Group and its growing Information Services business. We look forward to working with the Group to capitalize on our ESG data, research, and modeling capabilities to provide new solutions within sustainable finance on a global scale.
“We have worked together for some time on potential solutions and products based on client demand and market trends and will build on our strong ESG foundations to deliver valuable investment tools in the near future.”