JP Morgan selects Datamaran to monitor material ESG issues

JP Morgan has partnered with London-headquartered ESG risk management platform, Datamaran, to power the firm’s new digital platform, ESG Discovery, to deliver insights into investment opportunities using a double materiality approach to ESG integration.

The collaboration will enable JP Morgan to provide investors with timely information on material ESG risks and opportunities at both a company and sector level on an ongoing basis via the new platform.

ESG Discovery will leverage Datamaran’s AI-driven ESG monitoring technology to establish an integration process based on double materiality, which considers the importance of ESG issues from both the financial and impact materiality perspectives.

The two companies teamed up to establish materiality assessment models for JP Morgan, utilising data from corporate disclosures, mandatory regulations, voluntary policy initiatives and online media. Together, these sources will capture signals on sentiment and anticipate which emerging topics are positioned to have an impact on the financial markets.

“ESG Discovery will provide JP Morgan’s sector analysts with the unique ability to assess ESG issues according to a client’s own ESG priorities, providing in-depth, fundamental and forward-looking opinions on ESG performance, which are increasingly important to our clients,” said Sophie Warrick, head of EMEA equity research & co-head of global ESG research, JP Morgan.

“We believe the double materiality approach serves the diverse and rapidly evolving needs of our clients by addressing a broad range of ESG investment strategies, from ESG integration to impact investing.”

JP Morgan’s equity research team will also support the platform, complementing the its information availability with their input.

Additionally, JP Morgan equity analysts will use the platform to monitor emerging issues and identify those that may have an impact on the financial markets in the future.

The collaboration between JP Morgan and Datamaran highlights growing investment in ESG assessment tools and frameworks, as ESG risks are increasingly considered long-term financial risks by large institutional investors.

Datamaran’s double materiality approach also aligns with the European Union’s corporate sustainability reporting directive adopted on 21 April 2021, requiring European companies to conduct a double materiality assessment.

According to a survey by sustainable advisory services provider, Avanade, and the non-profit financial services association, Qorus (formerly Efma), 70% of the banks see their ESG work as having a positive impact on their market reputation and credibility.

The survey also revealed that banks were primarily using technology to develop climate data analytics and reporting systems.

In July, Denmark’s central bank reportedly selected the ESG research arm of MSCI to secure data and screening tool for the country’s foreign exchange reserve in order to ensure the reserve fund’s management’s compliance with the ESG guidelines.

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