RepRisk, K2 Integrity Announce Partnership to Help Investment Managers Combat 'Greenwashing'
RepRisk, a leading ESG data science organisation that combines machine learning and human intelligence to identify ESG risks, and K2 Integrity, a leading compliance and risk advisory firm, announced a new partnership to strengthen K2 Integrity's ESG advisory offering.
RepRisk will provide K2 Integrity with access to its independent ESG risk data through the new partnership, which will be incorporated into the process and analysis used in K2 Integrity's new, first-of-its-kind ESG fund certification solution, which analyses whether managers and funds are compliant with ESG regulations.
Alexandra Mihailescu Cichon, Executive Vice President at RepRisk, said:
"When we look at our data, one of every five climate-related ESG incidents over the past two years was also linked to misleading communication (greenwashing). This presents a challenge for investors when it comes to separating empty promises from meaningful action and a challenge for funds in proving their credentials.
"We are excited to partner with K2 Integrity to help tackle this challenge by making our unique ESG risk data part of their certification process. Together, we can help bring greater transparency and accountability to the market – while also supporting investment firms in their efforts towards more sustainable investment.”
The new solution from K2 Integrity intends to assist investment firms and their managers as they face expanding ESG rules, such as those imposed by the Securities and Exchange Commission in the United States and the recently implemented Sustainable Finance Disclosure Regulation (SFDR) in Europe.
To help solve the industry-wide issue of greenwashing, the solution provides managers with independent, thorough examinations of their products to confirm they are compatible with local ESG regulations and deliver on their ESG targets as promised. RepRisk's leading ESG risk data will aid the analytical process of K2 Integrity's new offering.
Andrew Rabinowitz, Co-CEO of K2 Integrity, added:
“About a year ago, I came to K2 Integrity to build an ESG business and partnered with some fantastic people and firms internally and externally, including, but not limited to, Neelam Sharma, Marcel Herbst, and of course, RepRisk. We believe that there is increased demand for transparency from stakeholders, regulators, and the investment community to address important issues such as diversity, equity and inclusion, sustainability, and strong governance, and combat accusations of greenwashing.
"Our partnership with RepRisk will enable us to leverage both of our strengths to provide managers with an unrivalled solution to verify to the marketplace, limited partners, and regulators that they do what they say they are doing.”
RepRisk takes an outside-in approach to ESG by looking at a broad range of public, media, and reputable stakeholder sources to identify ESG risks. It intentionally excludes company self-disclosures to provide clear, transparent, and impartial insights on a company’s ESG risks and business conduct across its operations. AI and machine learning empower the speed and size of RepRisk’s dataset, while human intelligence adds depth and relevance.