Target Information

ISS Sustainability Solutions, the sustainable investment division of ISS STOXX, has officially acquired Sust Global, a prominent provider of geospatial risk modeling and analytics focused on assisting institutional investors and insurance companies in understanding and assessing asset-level risks across diverse geographic datasets and domains. Established in 2020, Sust Global leverages a proprietary geospatial AI engine to deliver in-depth analytics that reveal relationships, trends, and patterns within specific regions, yielding high-resolution insights on significant climate and nature-related physical risks.

Sust Global offers a range of adaptable data products that seamlessly integrate into established processes for institutional clients. Their solutions include a visual risk analytics tool, regulatory reporting solutions, data exports, direct API tools, and customized options. The platform harmonizes various data modalities, trains predictive models tailored to specific domains, and effectively incorporates these models into the workflows, applications, and indices of institutional investors.

Industry Overview

The demand for geospatial data and advanced physical risk analytics is surging rapidly among institutional investors. This demand is driven by the increasing awareness of environmental and social governance (ESG) factors that could significantly affect investment portfolios. With the growing impact of climate change on asset performance, the integration of geospatial analytics is becoming essential for financial institutions to manage risk effectively.

In many countries, including those in Europe and North America, institutional investors are recognizing the importance of understanding location-specific risk exposures. This is particularly relevant given the implications of regulatory compliance and risk management strategies that need to align with sustainability initiatives. Enhanced geospatial risk analytics not only provide crucial insights into potential financial impacts but also contribute to maintaining competitive advantages in an evolving market.

Furthermore, educational institutions and research organizations are investing in geospatial analytics' capabilities. This surge in investment is propelled by the technological advancements in AI and machine learning, enabling more detailed analyses of environmental factors. Financial institutions now have access to robust tools to support their decision-making processes.

Rationale Behind the Deal

The acquisition of Sust Global by ISS Sustainability Solutions is a strategic move to strengthen their offerings in the realm of geospatial data and risk analytics. By integrating Sust’s advanced analytics platform with ISS’s proprietary asset-level data, the collaboration aims to create a comprehensive solution for institutional investors. The ability to map and analyze risks across various corporate and investment portfolios is expected to enhance the effectiveness of the solutions provided to clients.

As climate-related risks continue to escalate, the need for innovative monitoring tools like those offered by Sust Global will be crucial for investors aiming to make informed decisions. This partnership facilitates the advancement of sustainable investment practices and supports ISS’s commitment to delivering enhanced services in response to market demand.

Investor Information

ISS Sustainability Solutions operates under the larger umbrella of ISS STOXX, which is instrumental in developing responsible investing frameworks and practices. The organization provides expertise in screening solutions, data analytics, and advisory services, enabling financial market participants to navigate sustainability-related risks across various asset classes.

With a strong foundation dating back to 1985, ISS STOXX offers world-class benchmark and custom indices, serving clients with an emphasis on independent governance, sustainability, and risk assessments. The firm employs over 3,800 professionals across 30 global locations, catering to around 5,500 clients, including many leading institutional investors who rely on ISS for objective insights and recommendations.

View of Dealert

From an investment standpoint, the acquisition of Sust Global by ISS Sustainability Solutions presents a potentially advantageous opportunity. The increasing significance of geospatial risk analytics in the financial sector cannot be overstated, particularly as investors face growing pressures to understand and mitigate climate-related risks. Sust Global's innovative platform could enhance ISS’s value proposition in a competitive market.

Moreover, the alignment between Sust Global’s capabilities and ISS’s strategic direction suggests a synergetic fit that could lead to innovative solutions for institutional clients. The newly combined offerings could establish ISS as a leader in sustainability analytics, enhancing its market position and ability to attract further investment.

However, it is essential to monitor the integration process and the continued evolution of market demands. Should ISS successfully leverage Sust Global's technology, it could unlock significant growth potential and solidify its reputation in an industry increasingly focused on sustainable practices.

View Original Article