February 20, 2009
Riskmetrics to Acquire Innovest
by Robert Kropp
RiskMetrics cites expansion of research on environmental, social, and strategic governance issues
as major reason for purchase.
RiskMetrics Group, a provider of risk
management and corporate governance products and services to the global financial markets, has
announced that it will purchase Innovest
Strategic Value Advisors, a New York-based corporate sustainability investment research firm.
The acquisition is expected to close on March 2, 2009.
According to Stephen Harvey, head of governance at
RiskMetrics, Innovest's quantitative approach to assessing environmental, social, and strategic
governance (ESG) issues helps investors view intangible, compliance-oriented issues more clearly.
Innovest applies a detailed analysis of extra-financial best-practices in its research
which offers portfolio diversity as well as an activities screen which evaluates company
involvement in 15 activities typically screened by many socially-responsible investors, such as
tobacco, alcohol, and weapons.
RiskMetrics produces sustainability risk reports that help
institutional investors and investment managers determine which companies have comparative best
practice in each of the four pillars of RiskMetrics' research model. The four pillars examined are
climate change, other environmental issues, labor and human rights, and ethics.
RiskMetrics currently provides ESG research to more than 350 global institutions, and the
addition of Innovest's ESG analyst team of more than 50 research professionals will help investors
make more informed decisions.
Because it is expected that after years of inaction under
the Bush administration the Environmental Protection Agency (EPA) will formulate a carbon emissions
trading scheme, the merger of two established firms with expertise in the fields of climate
governance and carbon finance should be of particular interest to socially responsible investors.
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