ATLANTA & NEW YORK– With the broader adoption of ESG and sustainable investing by more companies and investors, a growing number of market participants are seeking to understand the potential social impact of their investment.
This is particularly the case in the municipal bond market, where proceeds are used to build public works, parks, schools, libraries and other infrastructure. When assessing similar bonds issued by different local governments, considering how these funds could impact the population at the municipal level can help investors and other market participants make more informed decisions about where to allocate their capital.
“These new social impact scores provide a deeper level of socioeconomic and demographic data on the municipal bond market, enhancing the decision-making process for investors as they execute their sustainable and socially-conscious investing strategies,” said Lynn Martin, President of Fixed Income and Data Services at ICE.
“By building on risQ’s expertise with geospatial climate and social data, we’re able to provide market participants with the transparency they need to quantitatively analyze and compare securities and the potential social impact of investments across different communities.”
The social impact scores leverage dozens of variables from multiple public data sources and peer-reviewed statistical methods to help quantify multiple dimensions of socioeconomic vulnerability and need.
These scores are designed to signal the potential social benefit of an investment within a specific area, with higher scores indicating that a financial investment in a specific community is expected to have a larger potential social impact than an investment in a community with a lower score. Once calculated, the scores are mapped to ICE’s U.S. municipal bond reference data, providing an additional metric for customers to use to evaluate an investment or a portfolio.
The score inputs include data capturing affluence, poverty, education, employment, housing costs, racial diversity, and health challenges. Aggregating these data points and mapping them to individual bonds can make it easier to compare cohorts and the potential social impact of an investment opportunity.
“Investors and market participants want ways to quantify and appropriately understand the potential impact of their investment, and this new service that we’ve created with ICE helps do that,” said Evan Kodra, CEO of risQ. “Whether investors are aligning their investment program with their values and mission or if they’re seeking to better quantify and understand the social impact of potential investment opportunities, these resources provide clearer insights into those goals.”
Intercontinental Exchange, Inc. (NYSE: ICE) is a Fortune 500 company that designs, builds and operates digital networks to connect people to opportunity. We provide financial technology and data services across major asset classes that offer our customers access to mission-critical workflow tools that increase transparency and operational efficiencies. We operate exchanges, including the New York Stock Exchange, and clearing houses that help people invest, raise capital and manage risk across multiple asset classes.
Our comprehensive fixed income data services and execution capabilities provide information, analytics and platforms that help our customers capitalize on opportunities and operate more efficiently. At ICE Mortgage Technology, we are transforming and digitizing the U.S. residential mortgage process, from consumer engagement through loan registration. Together, we transform, streamline and automate industries to connect our customers to opportunity.
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For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see ICE’s Securities and Exchange Commission (SEC) filings, including, but not limited to, the risk factors in ICE’s Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on February 4, 2021.
