Proxy adviser Glass Lewis merges with Clarity AI

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Photo by Timon Schneider/SOPA Images/LightRocket via Getty ImagesGlass Lewis & Co. is merging with European-focused ESG data and analytics firm Clarity AI, as the proxy adviser expands its footprint in a market where investor demand for managing climate and sustainability risks are on the rise.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountThe deal, which closed on Wednesday, was completed as an all-share swap via a newly created holding company, according to a statement. The geographic focus of Clarity AI, which lists Banco Santander SA, ING Groep NV and BNP Paribas SA among clients, will be “complementary” to the markets already covered by Glass Lewis, chief executive Bob Mann said in an interview.The companies declined to provide financial details of the deal. The proxy adviser’s majority owner, Canada’s Peloton Capital Management, will remain as the combined company’s dominant shareholder, Glass Lewis said.SUBSCRIBER EXCLUSIVE: FP West: Energy Insider brings you behind the oilpatch’s closed doors with exclusive insights from insiders every Wednesday morning.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of FP West: Energy Insider will soon be in your inbox.We encountered an issue signing you up. Please try againIntegrating Clarity AI’s ESG data-analysis platform with Glass Lewis’s advisory and stewardship services will provide an opportunity to “reframe the proxy voting industry,” Mann said. That’s as the political environment in the United States complicates efforts around proxy voting.The transaction follows a December order by President Donald Trump to limit the scope of proxy advisers to provide voting recommendations on proposals that address ESG issues. The administration targeted the industry as part of its sweeping pushback against investing that takes environmental, social or governance issues into account.“The reality is that however you want to call those topics, all those topics are more relevant now than ever” and “what is behind those topics needs to be measured, needs to be analyzed, and the investors need the facts,” Rebeca Minguela, founder and chief executive of Clarity AI, said in an interview.Investors “want consistency across the voting world and the stewardship world and the investment world,” she added, and “the fact that we can now tell them you have tools that are consistent across both worlds is actually quite attractive.”Europe, meanwhile, has enforced regulations that support investor efforts to manage the transition to a low-carbon economy.For example, changes to requirements regulating European insurers, which go into effect at the end of January, mean a “significant amount” of capital will be released, according to the European Insurance and Occupational Pensions Authority. Policymakers intend for the money to be channelled into investments that support the EU’s strategic priorities, including the green transition, and EIOPA says it will be monitoring for compliance.Mann said it’s clear the U.S. and Europe are “diverging,” and that means that “we as a firm need to be able to meet clients in both regions where they are.”In the U.S., “we’re going to move away from having a house policy,” Mann said. Instead, the company will require that clients develop their own voting policies and recommendations, while Glass Lewis will “provide the appropriate context and research.” That’s where Clarity AI’s data and analytics tools come in, he said.If a client is “really a sustainability-oriented investor, there will be sustainability-centric voting research that they can leverage,” Mann said. And “if they invest in management teams, they’ll get a different research style that’ll go with it.”In Europe, Clarity AI will serve as a platform for extending Glass Lewis’s services, Mann said.“Supplying data without insights only lets you access part of the market overall,” he said. “Providing insights as a layer on top of that expands the number of institutions that can use you as a service provider.”We apologize, but this video has failed to load.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.