Sky9 Capital Contributes to UN PRI’s Investor Data Needs Framework
On June 20th, the United Nations-backed Principles for Responsible Investment (UN PRI) released the “Understanding the Data Needs of Responsible Investors: The PRI’s Investor Data Needs Framework”, which offers a structure to identify decision-useful corporate sustainability data for responsible investors.
Sky9 Capital formally signed and joined the UN PRI in 2021, becoming one of the first venture capital firms in China to join the organization. In this project, Sky9 Capital, alongside 23 other leading global asset management and investment institutions, provided suggestions for the content. Sky9 Capital contributed to the development of the framework from the perspective of an early-stage venture capital firm.
Responsible investors need decision-useful data to inform their investment process and reporting. Recent developments in standards, rules and laws regarding corporate sustainability disclosure aim to address these data needs. However, standard setters and regulators often consider responsible investors as a single, homogeneous group of financial market participants with common data needs. In practice, responsible investors differ significantly in their needs for data, due to differing objectives, strategies, jurisdictions, etc.
To ensure that these disclosure standards, rules and laws provide decision-useful information to all responsible investors, there is need for a more evidence-based understanding of responsible investors’ data needs. This is particularly timely as standard setters develop more complex issue-specific standards.
The framework identifies three broad requirements of decision-useful data:
- Data must be available;
- Data must be of sufficient quality;
- Data must be relevant. This is defined using a ‘relevance matrix’, which consists of investment strategies (fundamental, quantitative, and passive strategies), responsible investment activities (research, valuation, portfolio construction, management, reporting), and data characteristics (type of data, nature of data, the time horizon of the data, the granularity of the data, etc.).
Based on these, the framework provides a series of steps to identify data needs. As the framework covers most investment strategies and investment activities used by responsible investors, an investor can identify its individual data needs. Likewise, the framework can be applied to identify the data needs for all signatories applying any or all of the investment strategies and responsible investment activities in the framework.
Download the PDF version of the framework here: https://www.unpri.org/download?ac=18762