Winter Summit recap (Day 3): Regulatory outlook and ESG integration
At the final day of Neudata’s Winter Summit, we focused on the regulatory landscape for alt data, explored the key challenges facing investors as they work to integrate ESG criteria into their portfolios, and shared tips for attracting talent to your organisation.
In our first presentation of the day, Sondra Campanelli explained Neudata’s new product offerings — Neudata Provider and Neudata Academy. Neudata is making parts of its platform more accessible to data vendors in order to share training resources and industry news. Providers that want to learn more can reach out to [email protected].
We then welcomed Celia Fraser of Capital Group and Pauline Hawkes-Bunyan of Investment Association to the virtual stage for a conversation with Dean Murphy on the importance of attracting, retaining and training data science talent within the asset management world. The panel stressed that it’s important for organisations to continually invest in their data science staff — skills go stale quickly, so employers need to encourage their employees to grow their skills and stay relevant.
Next, Hivemind’s Christian Gilson and IHS Markit’s David Hunt spoke about their firms’ approaches to building ESG datasets, while Dawson Smith from LeapYear Technologies addressed the importance of incorporating differential privacy into datasets that are sold to the buy-side.
We rounded out the morning session with a legal and compliance panel discussion. Lawyers from Schulte Roth & Zabel LLP, Two Sigma and PDT Partners joined Neudata’s Don D’Amico to explore the different ways that hedge funds gather and use data. The group explained that, as a baseline, data vendors should have a chain of consent from all parties that are sharing their data and verification that data doesn’t contain PII. Buyers are also concerned about reputational risk — so much so that they might not use legal datasets that they think contain alpha if they think they could have to answer to the media or their investors. They also advised vendors to invest in tools that make the compliance process easier, whether that’s creating a compliance starter pack for buy-side lawyers, making data dictionaries available, or filling out DDQs on the Neudata platform ahead of sales conversations.
After a quick networking break, Neudata’s Helena Yu shared her thoughts on how alternative data could help track China’s recovery. Chinese datasets that proved popular in 2020 included web-scraped, economic and event data types. Investors are also keeping a close eye on the country’s data security law, which is being finalised this year, causing many Chinese data vendors to ramp up their internal compliance efforts.
Next, Dritan Nesho at HarrisX presented on how investors can use real-time consumer research data to track movements in the market.
To continue the ESG theme from earlier in the day, Neudata’s resident ESG expert Julia Meigh gave attendees a closer look on how investors are finding the data they need for their ESG models. She explained that a lack of industry framework makes it difficult to standardise ESG terminology across the industry, but many investors use SASB and the UN SDGs to measure their investing impact. She also explored problems with self-reported “traditional” ESG data and highlighted several types of data that have seen an uptick in interest in recent years, including human capital data.
She then joined a panel with Ian Webster and PanAgora’s Mike Chen, which addressed how investors can measure human capital factors, particularly around diiversity of thought within organisations. The group explored the intersection of company diversity and culture and spoke about the traits that create successful organisations, as well as how to measure them.
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