Case Study

Calvert Research & Management

“Seeing the most material, relevant ESG events on a timeline makes it easier to digest the information, spot trends, and evaluate whether a company is responding in a way that is likely to create value for longer term investors like Calvert.”

DANIEL ROURKE, Vice President and Senior Research Analyst, Calvert Research & Management

Calvert Research & Management | Truvalue Labs

Headquarters
Washington, DC, USA

AUM
US $15 billion

With roots in responsible investing dating back to 1982, Calvert Research and Management is a global leader in the field. The firm sponsors one of the most diversified families of responsibly invested mutual funds, encompassing active and passively managed equity, income, alternative and multi-asset strategies. “Calvert is a well-known name because responsible investing is the core of what we do,” says vice president and senior research analyst Daniel Rourke. “That’s something we’re very proud of.”

Today, Calvert seeks to generate favorable investment returns for clients by allocating capital consistent with environmental, social and governance (ESG) best practices and through structured engagement with portfolio companies. “We look at ESG factors we believe are financially material to a company’s operations and performance,” explains services sector research analyst Imani Camp. “I am focused on certain issues–such as a company’s ability to attract and retain a talented workforce–that can have an impact on the value of a company in the industry over the medium and long term.”

Understanding how a company manages its ESG risks and opportunities requires analyzing and evaluating information from a wide variety of sources, including corporate disclosures, third-party rating agencies and news services. “There’s a lot of critical thinking involved,” Daniel points out. “We have to connect disparate information and make principled judgements about how companies are managing their impact on the shared environment and civil society. One of the central questions for our research is: How might ESG factors influence a company’s financial performance?”

Leveraging AI to Uncover Hidden Insights

To add to its analyses, Calvert was an early adopter of Truvalue PlatformTM from Truvalue Labs. Truvalue Labs was the first to provide ESG analytics based on the Sustainability Accounting Standards Board™ (SASB™) Materiality FrameworkTM of 30 indicators. The company was also among the first to apply natural language processing (NLP) and artificial intelligence (AI) to glean insights from enormous volumes of unstructured data from thousands of sources – news and trade media, regulatory filings, government agencies, NGOs and more. Powerful algorithms process that data in milliseconds to score companies on ESG factors in real time as events occur. The platform also provides ESG Momentum™ scoring so analysts can quickly evaluate a company’s trajectory – whether it is improving or declining on ESG metrics.

Truvalue Platform has become a helpful tool in Calvert’s research arsenal. “Spotlight solves some significant challenges that research analysts face,” said Daniel. “On any given day, there is a flood of information in the market on the companies that I cover. Seeing the most material, relevant ESG events on a timeline makes it easier to digest the information, spot trends, and evaluate whether a company is responding in a way that is likely to create value for longer-term investors like Calvert.”

“We are continually looking for innovative ways to identify emerging ESG issues,” explains quantitative research analyst Yijia Chen. “The way that Truvalue Labs provides up-to-date signals on material issues, and the direction those signals are moving, is a powerful insight. We appreciate the timeliness of the information, particularly when comparing a company with its peers.”

For Daniel, the platform was also helpful in conducting research on private companies. “I was reviewing a private company and started with a standard pitch deck and some deal-related documents. I wanted to better understand the market sentiment on the company related to material ESG issues. I did a web search and didn’t find anything particularly current or useful. When I did a similar search on Truvalue Platform, the second article I found had the type of ESG-related information that I was looking for. That is when I realized the value of the platform for research on companies with limited public disclosure.”

See a More Complete Picture, More Clearly

Imani cites the utility of Truvalue Platform at a time when companies are in the news over controversies. “Just to be able to clearly see the sheer volume of attention that a firm or an issue is getting in real time is helpful contextually,” she says. “That’s something that’s typically not easy to capture and I think the platform does that in a way that is intuitive for researchers.”

The People Behind the Platform

Calvert has also seen the benefits of having an ongoing dialogue with the people who are running and building Truvalue Platform. “I like that the product is continually evolving based on feedback from users,” says Daniel. “That type of product development can add real value. The team is readily available to talk and engage.”

Imani concurs. “The company-level research briefs published by Truvalue Labs provide helpful thought leadership on ESG integration with fundamental research.”

Yijia adds, “Across the market, investors are trying to understand how to integrate ESG analysis and investment decisions. The methodology employed on Truvalue Platform is transparent and consistent, which is valuable for quantitative researchers.”

Case Study

Calvert Research & Management

Calvert Research & Management is a registered Investment Adviser focused on Responsible Investing.

Calvert is continually looking for advanced and creative ways to understand corporate performance on ESG issues, particularly from sources that provide insight beyond corporate disclosure and reporting.

“We are continually looking for innovative ways to identify emerging ESG issues. The way that Truvalue Labs provides up-to-date signals on material issues, and the direction those signals are moving, is a powerful insight. We appreciate the timeliness of the information, particularly when comparing a company with its peers.”

Yijia Chen
Quantitative Research Analyst
Calvert Research & Management

More Case Studies

See how investors are using our ESG insights and analytics for multiple asset classes for building composites, integrating it into quantitative strategies, leveraging it for values-based portfolio construction or using it for manager selection and monitoring.