Elsa Pau’s new platform aims to help investors and fund selectors gauge ESG credentials | DigFin

Published on February 2, 2021 by Jame DiBiasio

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Elsa Pau is a Hong Kong-based publisher and editor-in-chief of Benchmark magazine, a role she’s held since 2010. The publication is widely followed among wealth and fund managers for its annual awards, which involve a detailed analysis of funds and portfolios. She is also a longstanding advocate for impact investing and women leadership in asset management.

Pau has now founded BlueOnion as a fintech portal to promote responsible investing and clarity by exposing asset managers’ qualitative and sustainability performances. The first iteration has run as a proof of concept since mid-2020 and a new version is being rolled out this spring.

What problem are you addressing?

BlueOnion is educating gatekeepers at institutional investors, family offices and banks’ wealth-management arms to stop relying on backward-looking data. We are quantifying the qualitative and sustainability aspects of portfolio managers’ funds in order to create forward-looking data.

Fund management companies make big statements about ESG and signing on to the U.N. Sustainability Development Goals and the Paris Agreement. But the individual portfolio managers don’t necessarily follow those concepts or principles. They can choose how to interpret these commitments.

At the same time, every vendor of ESG data has a different definition of materiality. We’re not trying to create categories of our own – we’re not trying to be another Sustainalytics or an MSCI. We’re helping asset managers and gatekeepers tilt scores to what’s materially important to them.

What does BlueOnion do?

We’ve built BlueOnion to be a subscription-based platform disseminating our data on funds and managers, so gatekeepers don’t have to wade through stacks and stacks of PDFs. We display the data and our upcoming version will allow gatekeepers to measure their ESG risk exposures at the portfolio level. That version should launch by March.

At Benchmark, we have been amassing detailed fund information for years. We run our annual awards like an advisory firm would conduct due diligence on fund managers. We now have 174,000 funds on the platform.

Over time, the banks realized Benchmark could validate all the pitches they receive from fund managers, and many use our awards to go shopping for managers.

Two years ago I began to wonder if we should move all of this to a digital platform, and realized it could do more than just manage an awards process. We could take a holistic approach for gatekeepers. We’ve now released our “minimum viable product”.

What does this look like in practice?

We combine our due-diligence work on funds with third-party data at the fund-attribution level to give users a dashboard that gives every fund in our database an ESG score. We also score each fund for how closely it tracks the asset manager’s claimed adherence to the Paris Agreement.

We’re a fund aggregator so users can measure for traditional metrics like fund performance, but also for what’s important to them: maybe it’s exposure to companies selling alcohol, or recycling, or overall corporate stewardship.

What else do we need to know?

The next version, which I call “MVP1.5”, is exciting. It will take analytics down to the individual stock level, while allowing allocators to view their ESG exposures at a portfolio level.

The real innovation, though, is using this platform to bring asset managers and allocators closer together. 

Right now when gatekeepers conduct due diligence on asset managers, it’s very manual. They can’t connect their screens and controls with RFPs or how they collect information. Our dashboard is going to have a back end to digitize this, which will not only make life easier for gatekeepers but also allow asset managers to see where their RFP sits in the approval process.

And if the gatekeeper accepts their fund, the asset manager can populate our portal with research and news related to the investment strategy. They can send this directly to the bank, which will help the relationship managers sell the funds to the bank’s customers.

The article was originally published on DigFin Green: Elsa Pau, BlueOnion – Digital Finance (digfingroup.com)