The shakeout in the ESG analysis market has continued with the announcement today of the acquisition of ASSET4 in Switzerland by news and information giant Thomson Reuters for an undisclosed sum.
The past few months has seen a spate of deals with RiskMetrics taking over KLD and Innovest and mergers between Centre Info and INrate and Jantzi Research and Sustainalytics.
This latest move gives a clue to the future shape of the industry as the major data providers look to enter a growing market. Thomson Reuters’ arch rival Bloomberg recently launched its own ESG data service.
Zug-based ASSET4 was founded in 2003 by Peter Ohnemus and Henrik Steffensen and has clients such as Bank Sarasin, Storebrand and Société Générale. It had an existing financial data supply deal with Thomson Financial. Thomson Reuters said in a statement: “This deal comes at a time when financial firms and investors alike push for more transparency and disclosure on ESG factors and when ESGconsiderations are no longer just the concern of lone funds that target the socially responsible investors. Of the US$55trn global equities market, approximately $5trn are screened for a variety of ESG issues already. This figure is expected to increase as mandated and voluntary disclosure is set to increase. “This deal represents a step forward in the integration of

ESG data into mainstream financial analysis and underscores Thomson Reuters commitment to meet the evolving needs of the global financial community. Thomson Reuters’ acquisition of ASSET4’s business is timely as our clients are looking for deeper insight into the combination of financial and extra-financial factors that drive the performance and risk of their investments”, said Abel Clark, global head of strategy and marketing, Investment and Advisory at Thomson Reuters
“Thomson Reuters is the natural choice to take the extra-financial information and tools that ASSET4 has built over the last five years to a truly global and mainstream client base,” said ASSET4 chief executive Ohnemus. Reuters’ news service reported that the firm intends to include ASSET4 data in its products, such as 3000 Xtra and Datastream. It quoted Clark as saying that the company plans to rapidly integrate ASSET4 into its core financial products.
The consolidation of the industry was a main topic at Responsible Investor’s ‘The Future of ESG Integration’ conference in Amsterdam recently. Former KLDmanaging director Tom Kuh for example said he thought the current wave of consolidation was just beginning. He estimated the value of the ESG research market as €40-50m per annum dividing among around 20 firms.