At a Glance: Truvalue Labs SASB Spotlight Data Feed
Truvalue Spotlight brings transparency to positive and negative ESG events through bulleted summaries of the most impactful news articles, along with qualitative and quantitative information for every event.
Truvalue Labs’ SASB Spotlight Data Feed is a daily collection of the most important positive and negative ESG events, referred to as Spotlight Events. Truvalue’s algorithms extract individual events after parsing through unstructured content from over 100,000 different sources. Each Spotlight Event is tied to a company and at least one of the categories defined by the Sustainability Accounting Standards Board (SASB).
Truvalue Spotlight brings transparency to these events through bulleted summaries of the most impactful news articles, along with qualitative and quantitative information for every event. Qualitative data includes the SASB category and news article metadata, while quantitative data items include Truvalue Pulse scores before and after the event, article volume, and more.
Truvalue SASB Spotlight covers over 19,000 public and private companies globally, with history back to 2016.
Asset Class: Public and Private Companies
Data Frequency: Event-Driven
Delivery Frequency: Daily
History: Data available back to 2016
Truvalue’s methodology brings an outside-in perspective to measuring ESG performance by aggregating a variety of sources, instead of relying on company-reported materials at risk of company bias. Truvalue starts by collecting unstructured data in over 10 different languages from over 100,000 sources, such as news, government agencies, NGO’s, and more.
Through processing this unstructured data, Truvalue establishes context around each data point to extract and categorize sustainability events according to the categories defined by SASB. Once an event has been identified and created, Truvalue’s algorithms aggregate all articles associated with that event. These events are then factored into a company’s Truvalue ESG scores. Each data point is weighted according to its timeliness and intensity within scoring formulas that reveal short-term and long-term performance.
The end result is a dataset that includes textual summaries of each event, metadata such as the original source, event trigger date, event end date, as well as Truvalue ESG Pulse scores and more. The Truvalue SASB Spotlight Data Feed works seamlessly with the Truvalue SASB Codified Data Feed, which includes daily short-term, long-term and momentum ESG scores for the same universe of companies.
Leverage Enhanced Transparency into ESG Performance
Truvalue Spotlight exposes the specific events that drive changes in a company’s ESG performance. This dataset can serve as an added layer or the backbone to ESG strategies by leveraging the qualitative and quantitative data items provided.
For example, investors can aggregate Spotlight Pulse scores using a customized methodology that isolates events related to specific SASB categories. This allows them to create a unique view of companies’ ESG performance.
Truvalue Spotlight can also be paired with other ESG scores to capture the outside-in perspective and understand how events impact ESG issues as they unfold . In doing so, Spotlight offers an opportunity to amplify and mute the impact of events as it suits the user’s needs.
Spotlight Events can also be leveraged to monitor ESG events within a portfolio, as a means for staying on top of the most relevant ESG issues taking place for a user’s holdings.
Add an Event-Driven Layer to Quantitative Strategies
Truvalue Spotlight Events can be used as the basis of multiple quantitative strategies:
Short-Term Trading (1 to 20 days)
Prices respond quickly to the most significant positive and negative ESG events. Certain events come as bigger surprises, leading to a strong change in ESG score on a particular topic, while other events serve more as reinforcements that increase the confidence that the current ESG score on that topic is correctly measuring the polarity of positive or negative sentiment on that topic.
Medium-Term Spotlight Momentum
Users of the data can examine the impact of a series of Spotlights and how they build on each other. Surprise and Reinforcement Events can be extended to look at longer sequences of different types of events to see patterns of long-term progressions from an initial surprise into multiple stages of reinforcement.
Long-Term Impact on Fundamentals
Positive and negative Spotlight momentum can influence company fundamental measures such as revenue growth, profit margins, and return on capital. Spotlights can be used for predicting changes in fundamentals, particularly for EBITDA margins which incorporate both revenue growth and cost changes.
The details provided above are as of November 2020.
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