Last month, during Climate Week in New York, London-based RG Sciences (RGS) launched the first-ever Impact Leaders Portfolio, highlighting 110 global publicly traded companies and their impact performance. RGS examined whether companies that are leaders on impact within their sectors can also deliver strong financial returns, revealing positive signals that impact and long-term value creation can go hand in hand.
RGS Impact Leaders Portfolio
By leveraging proprietary AI tools, 60+ outcome-based metrics, social costs, and a rigorous, science-based methodology rooted in impact accounting principles, RGS assessed the performance of 10,000+ global publicly traded companies based on their Environmental, Employment, and Customer impacts.
Based on this analysis, RGS selected the top 10 companies from each sector to create an equally-weighted RGS Impact Leaders Portfolio, rebalanced annually at the beginning of each year. To qualify for the portfolio, a company must be a top 10 leader in total monetized impacts within its sector for at least two consecutive years and demonstrate year-on-year improvement in terms of impact.
In constructing this portfolio, RGS aimed to test the hypothesis: Can companies that lead on impact within their sector also deliver strong financial returns? The results are promising, showing that companies leading on impact within their sectors can also deliver positive financial returns and long-term value creation.
Who Exactly is RGS?
RGS was founded by Sakis Kotsantonis, an expert in the Sustainability space and founder of one of the top 10 ESG consulting firms, KKS Advisors; Harvard Business School Professor George Serafeim, recognized as one of the 20 most influential people in ESG investing globally by Barron’s; and Peter Kellner, an investor and sustainability and entrepreneurial thought leader for over 20 years who has co-founded Endeavor Global.
RGS is an impact intelligence platform that offers cutting-edge data and analytics solutions for investors and corporate leaders, enabling them to integrate an impact lens into their decision-making processes.
RGS was founded to address the inadequacies of current ESG solutions and to help investors meet the growing demands of clients and regulators. With the growth of greenwashing scandals, regulatory fines, and increasing scrutiny making headlines, market expectations for ESG and impact investing have shifted, exposing the limitations of traditional ESG metrics in accurately measuring the real-world impact of companies.
The firm’s mission is to provide actionable insights for investors and companies by first measuring the impacts that matter most and then linking those impacts to financial statements through monetization. Just as financial accounting became the infrastructure necessary for large-scale capital markets, RGS believes that the development of impact accounting & impact valuation is a much-needed infrastructure for the development of capital markets that are driven by sustainability considerations.
What type of data, services and related technology does your firm provide? Outline the unique data elements an asset manager can receive from you that are not generally available from others?
RGS is an impact data and analytics company with solutions for public and private equity investors, fixed income investors, and public companies. A few of these solutions include:
- ESG Impact Analytics – Comprehensive impact assessment aligned with impact accounting principles. Impacts are evaluated across three key stakeholders – Environment, Employees and Customers.
- Products and Services Revenue Datafeed – Company reported business segment revenues mapped to standardized products and services categories. Product categories are further mapped to key Environmental and Social impacts.
- UN SDG Impact Alignment Tool – Measures alignment and contribution of companies to the UN SDGs through their operations and their products and services.
- Climate Transition Alignment Tool – Dataset to identify companies that deploy or develop climate technologies. The data covers 90+ climate technologies together with their carbon abatement potential.
- Fixed Income Climate Analytics – Provides an assessment of the impact of climate change on securitized products, specifically auto loan Asset-backed Securities (ABS).
- AI Thematic Investing Solutions – Access a list of the most common impact investing themes across environmental and social dimensions with the ability to fully customize every parameter of portfolio creation.
Explain the basic process you use to collect and/or create the data you produce? Is any of the data you collect considered PII? Do you have all the necessary consents to collect and store the data you sell?
Our data is sourced from various publicly available materials, including sustainability reports, annual and quarterly financial statements, earnings transcripts, government databases, as well as academic and NGO research papers.
RGS then applies machine learning-driven statistical analysis, economic models, and monetization pathways, utilizing the latest library of social costs to assess the impact of companies on their Environment, Employees, and Customers. RGS has invested considerable time in developing advanced data quality processes to ensure data reliability and accuracy. RGS also provides transparency scores for each company, indicating the quantity and quality of company-reported data.
RGS holds a patent (U.S. Patent No. 11,941,567) on an information retrieval system and method for ESG analytics, underlying the significant intellectual property the team has built in acquiring and transforming sustainability data.
None of RGS’s data includes PII (personally identifiable information). RGS has all the necessary consents to collect and store the data they sell.
How much history can a client obtain from you? How frequently is this data updated?
- ESG Impact Analytics: 2015 – present, monthly update, 10K+ public companies covered
- Products and Services Revenue Datafeed: 2015 – present, monthly update, 10K+ public companies covered
- AI Thematic Investing Solutions: 2015 – present, monthly update, 10K+ public companies covered
- Climate Transition Alignment Tool: 2005 – present, monthly update, 10K+ public companies covered
- Fixed Income Climate Analytics for Auto Loans Asset Backed Securities: live datafeed, 300+ transactions, US & EU markets
Describe at least one “case study” of where your firm’s data, services or technology has proven to be predictive.
The financial materiality of impact data is one of the most important topics of discussion from an asset management perspective. Single-company case studies might be interesting in understanding the value levers that are relevant in creating competitive advantage when taking into account impact metrics, but if these results do not apply to a portfolio level solution then the data is insufficient for any investor to make decisions.
That is why, we tested our dataset in the most simple scenario – creating portfolios of high impact companies and comparing them against the benchmark. The graphs below show the results for our US only and our Global impact leaders portfolio (as of 11th Oct 2024). Both portfolios show good 3- and 5-year performance, with lower volatility. Given the equal representation for each sector every year we rebalance, there is less concentration risk to the technology sector and we have created a conservative portfolio with no meaningful bias from a style or factor standpoint.
US Impact Leaders Portfolio
Source: Richmond Global Sciences, Index One
Global Impact Leaders Portfolio
Source: Richmond Global Sciences, Index One
Who is your firm’s target market in the financial services vertical? What other types of consumers purchase your data?
Our primary target market includes institutional investors such as asset managers, asset owners, allocators, family offices and banks operating across both public and private markets. We also seek opportunities to sell our products to retail investor platforms and corporations.
Who are some of your firm’s chief data competitors in the financial services market?
Clarity AI, FactSet, Sustainalytics.
What makes your firm different from other firms providing similar types of data, services, & technology?
- Innovative: RGS is the first to offer a proprietary AI tool that precisely maps over 90 climate solutions & technologies to company activities, enabling investors to identify publicly traded firms that are driving the transition to a low-carbon economy. Additionally, RGS is the pioneer in providing data and analytics on the impact of climate change on securitized products, with a
specificfocus on Auto Loan Asset-Backed Securities (ABS). RGS also leads the industry in moving beyond traditional ESG metrics by focusing on the impact of companies’ products and services on the environment and consumers, quantifying this impact in financial terms. - Rooted in science-based methodology: RGS’ impact assessment models are based on robust, researched methodology co-developed by RGS’s co-founder Professor George Serafeim at Harvard Business School, and are aligned to industry standards set by International Foundation for Valuing Impacts (IFVI).
- Comparable & scalable: RGS’s analytics engine translates ESG data into monetary values, enabling easy comparison across industries and impact dimensions. The platform allows investors to analyze both public and private companies using a consistent impact framework.
- Financially material: RGS focuses on impact areas that matter the most. Our data provide informational insights that can help generate value as shown from our Impact Leaders portfolio.
- Compliance relevant: RGS’ impact assessments are based on concrete outcome metrics rather than inputs or intentions to avoid greenwashing. RGS’ impact data & analytics meet most-current requirements for disclosure and scenario analysis
What is your firm’s commercial model? What is the price range for your service?
- Data Subscriptions: Between $10K and $75K / year, depending on data set, client, AUM, and use case
- Index Licensing: Fee is based on bps / AUM
- Consulting Services: when creating new custom products (price varies)
What are a few of your firm’s next major targets/milestones?
- AI Biodiversity Tool: a screening tool that can be utilized to create a portfolio of securities based on RGS’ proprietary impact engine for thematic mapping purposes and can be used towards direct indexing as well.
- Green Claims Risk Assessment: AI-driven tool assessing companies’ public announcements, reports, and news related to their green claims in line with EU’s Green Claims Directive.
Contact Info
Sakis Kotsantonis
CEO | Richmond Global Sciences
T: +44(0)78 0962 1480
70 Gracechurch Street, London, EC3V 0HR
E: sakis.kotsantonis@rgsciences.com
Jean Thomas
Senior Managing Director | Richmond Global Sciences
T: +1 646 830 0866
70 Gracechurch Street, London, EC3V 0HR
E: jean.thomas@rgsciences.com