K2 Integrity, a leading compliance and risk advisory firm, announced strategic partnerships with RepRisk, a leading ESG data science firm combining AI and machine learning together with human intelligence to identify ESG risks, and Novata, the leading ESG data management platform built for the private markets, to bolster K2 Integrity’s new ESG fund certification solution.
The partnerships complement K2 Integrity’s existing partnership with the Maples Group, a leading provider of legal, fiduciary, fund, regulatory and compliance, and entity formation and management services with specialized ESG expertise and solutions. K2 Integrity and the Maples Group formed their partnership to launch a first-of-its-kind ESG certification earlier this year. The Maples Group will provide K2 Integrity with increased access to proprietary ESG data collection and management data, tools and expertise to streamline the certification’s analysis processes. The work with each firm will also allow K2 Integrity to offer bespoke certification offerings that align with specific regional jurisdictions.
“The need to validate and quantify ESG initiatives has never been greater,” said Andrew Rabinowitz, Co-CEO of K2 Integrity. “We started our ESG practice and developed this new offering to meet increased demand for transparency from stakeholders, regulators and the investment community to address important issues such as diversity, equity and inclusion, sustainability, and strong governance, and combat accusations of greenwashing. These partnerships with RepRisk, Novata, the Maples Group and other leading ESG experts will allow us to further advance our ESG certification program and help managers verify to the marketplace, limited partners and regulators that their offerings are aligned with what is being advertised.”
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K2 Integrity’s new ESG certification solution builds on the firm’s longstanding reputation for assisting clients with all forms of risk management and regulation compliance. Through rigorous, independent analyses of managers’ and funds’ disclosures and independent investigation research, the new certification program analyzes ESG products to certify they are compliant with local ESG regulations, including those from the US Securities and Exchange Commission and the recent Sustainable Finance Disclosure Regulation (SFDR) in Europe, as well as deliver on their ESG targets as advertised. The solution also evaluates offerings to make sure proper ESG targets have been set and certifies if those targets are being met.
Neelam Sharma, Chief Business Development and ESG Officer of K2 Integrity, added: “ESG compliance is a priority, we have successfully been able to respond to this industry need and launch an end-to-end ESG solution. While there’s more work to be done, we’re proud of the progress we’re making and continue to see strong demand for ESG certifications from clients inside and outside of the financial industry. With the increased support from these partners, we will be able to continue to advance our ability to help ensure compliance with increasing ESG regulations.”
The partnership with RepRisk will provide K2 Integrity with access to RepRisk’s independent ESG risk data – pulled from over 100,000 sources in 23 languages, and avoiding company self-disclosures – to refine the new certification solution’s analysis process. The partnership with Novata will provide the firm with access to Novata’s industry-leading, proprietary data collection and management software to streamline these processes. Over the past year, K2 Integrity and the Maples Group have partnered together with investment managers and academics from such renowned institutions as Cornell, Carnegie Mellon, Columbia, and University College-London to develop a robust, thorough, meaningful and independent ESG assessment certification for fund managers and funds. Together, the partnerships will allow K2 Integrity to customize the solution to offer different certification types that align with regional ESG regulations.
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Alexandra Mihailescu Cichon, Executive Vice President at RepRisk, added: “When we look at our data, one of every five climate-related ESG incidents over the past two years was also linked to misleading communication (greenwashing). This presents a challenge for investors when it comes to separating empty promises from meaningful action, and a challenge for funds in proving their credentials. We are excited to partner with K2 Integrity to help tackle this unique challenge and deliver greater transparency and accountability to the market – while also supporting investment firms in making more sustainable investment decisions.”
Josh Green, Chief Operating Officer and Co-Founder of Novata, added: “Today, appropriate measures of risk have expanded to include ESG considerations, since many ESG metrics directly affect how a company performs and, in turn, its financial value, presenting a whole new host of compliance and regulation concerns. We are very pleased to partner with K2 Integrity on their ESG certification program and help investors, managers, regulators and other stakeholders have confidence in the ESG products on the market.”
Mark Weir, Deputy Global Head of Fund Services for the Maples Group, added: “We recognize the importance of ESG and the role that our industry can play in contributing to societal good. Most recently, we have expanded our services in ESG to include the Maples Group ESG Platform ICAV. The platform is an Irish Collective Asset Management Vehicle regulated by the Central Bank of Ireland and offers a turnkey solution for clients looking to launch a segregated SFDR compliant Article 8 or Article 9 sub-fund, allowing them to take advantage of the high demand for ESG focused funds in Europe. We are proud that the platform works closely with key industry partners like K2 Integrity to contribute to the creation of a global ecosystem where the benefits of ESG can be realized.”
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