The What, Where and How: The Power of Proper Products and Services Data for Investors
In the world of investments, understanding the risks and opportunities associated with a company is critical. One essential piece of the puzzle is a complete picture of what a company produces or provides – AKA, products and services.
While many investors use this data to align with client mandates via exclusionary screening, or create positive impact investments, they may not be using it to its fullest extent. By leveraging products and services data properly, investors can gain a deeper understanding of a company’s potential for success and where they stand out from their peers.
At Impact Cubed, we split revenues into 2,300+ business activities, giving you the most granular insight into products and services, and how they’re impacting the world around us.
To truly maximise the benefits of any data, it’s important to start with the best. At Impact Cubed, we take this principle to heart by breaking down revenues into thousands of specific business activities that go beyond what most other data providers offer. For example, while other providers might stop at the broad category of ‘Technology Hardware’ (GICS level 3), we take it further by distinguishing between other detailed subcategories, right down to different types of display panel (a level 7 equivalent). This level of granularity provides a more comprehensive picture of a company’s ESG impact.
Going beyond a product
Beyond looking at the obvious impact of what a company makes, consideration can also be given to where they sell it, and how they operate as a business.
What. Where. How.
At Impact Cubed, this is all done for you. What a company makes is measured by the amount of revenue from products and services classifications. E.g. EV cars, vs internal combustion engines. Where the company sells is measured by the geographic split of those revenue streams, and how the company operates is measured by factual data on environmental, social, and governance considerations; we also know the location of its assets and operations for looking at things like physical climate risk.
Bringing it to life – Berkshire Hathaway Inc.
What: Products and Services:
A screenshot from our platform showing the breakdown of different products and services within Berkshire Hathaway Inc.
Where: Where they sell products and services
Where revenue from Berkshire Hathaway Inc. holdings come from
Where: they operate as a business:
Where assets from Berkshire Hathaway Inc. are located.
How: they operate as a business:
One of our spider diagrams illustrates the difference between Berkshire Hathaway Inc. and its peer group across ESG operational factors.
Traditional measures of operational performance, such as a company’s efficient water use or good governance practices, are often the first things that come to mind when considering a company’s ESG practices. However, our detailed products and services data is a window for seeing a company’s long-term value.
Our products and services hacks
We know that not everyone has the time, know-how or resources to comb through all the layers of products and services data. That’s why we’ve done some of the legwork for you by providing several off-the-shelf views that map important data to specific ESG and impact topics.
For climate-conscious investors, our list maps revenues to positive climate solutions (shown below), carbon market risks and carbon transition risks. The environmental view maps revenues to environmentally good and bad activities, while the social view maps revenues to socially good and bad activities as defined by the UN SDGs.
General Electric’s environmentally good products and services.
For investors interested in the United Nations’ Sustainable Development Goals (SDGs), we map revenues to each of the 17 SDGs as positive, negative, or neutral. Our regional revenue view looks at revenues broken down by geography for investors who consider localized impacts or risks.
General Electric’s SDG alignment with detail on SDG 7
We also offer a biodiversity view that maps regional revenues to business activities positively or negatively aligned to biodiversity.
Products and services data fits into business decisions by providing a more holistic view of a company’s operations.
Unparalleled insights into securities
- See what companies provide electrical grid equipment in the United States that may be eligible for subsidies or grants, or what companies are providing clean hydrogen services that may be eligible for tax credits for example.
A fund showing the breakdown of its products and services – such as Tesla’s Smart Grid Equipment
- Evaluate a company’s carbon emissions in tandem with the risk to its business activities as the market shifts toward low-carbon technologies.
This in-depth security analysis can reveal insights such as the growth of solar energy in countries like China and India, or the increasing demand for sustainable products in Europe due to regulatory pressures and consumer preferences.
Develop innovative products that drive AUM growth
- Identify regional opportunities: By breaking down data by region, investors can assess the performance of companies within specific geographies and identify region-specific opportunities and risks. For example, a company making electric vehicles (what) and selling them in a region that subsidizes electric vehicle purchases (where) is probably creating more long-term value than a company making conventional internal combustion vehicles (what) in a region where policymakers are phasing out fossil fuels (where).
Tesla’s geographic sales revenue
- Build positive impact funds: Because we map each revenue classification to all 17 United Nations’ SDGs, investors can build and offer portfolios that contribute to global sustainability objectives with a positive impact on society.
- Better screening: Investors can also screen companies based on unique preferences and exclude specific sub-industries or business activities that do not align with their investment goals.
Detailed products and services allow you to screen out securities that don’t align with your goals more easily
- Stronger collateral and loan books: With a wider range of positive and negative business activities available, investors can better assess potential risks associated with their collateral baskets or loan books. For example, an investor that has made zero carbon pledges may want to avoid high carbon emitters or fossil fuel companies in its collateral basket or loan book to avoid reputational risks related to greenwashing.
Get the Best Products and Services Data Today
By complementing your conventional ESG operational data with our products and services data, you can take a holistic view and gain deeper insights into a company’s operations, which can then be leveraged effectively.
As with all of our data, our products and services data is transparent, with full access to all layers of insight, and comes in standardised units making it easy to integrate into your existing investment systems.
Frequently Asked Questions (FAQs)
- What is Impact Cubed’s unique advantage over other ESG data providers?
Impact Cubed offers unparalleled granularity in its business activity classifications, with every revenue stream mapped to over 2,300 classifications and split into individual geographies. This provides better and more nuanced insights into company business activities.
You can ingest these business activities into your own proprietary ESG frameworks, or use ready-made revenue mapping to a plethora of vital dimensions such as:
- Climate risks and impact metrics
- Environmentally, and socially good and bad activities
- All 17 SDGs
- Individual geographies/regions
- SFDR fund classifications
- How does Impact Cubed’s detailed classification system benefit investors?
Investors can grow their AUM by creating new and different funds using a wider array of business activities tagged for ESG considerations, whether it’s climate, SDGs, or commodity profiling. Wealth managers can attract new clients by creating portfolios that are more personalized and aligned with investors’ goals. Investors who want to avoid carbon risk in their portfolios can have more confidence in the carbon emissions data, which results from better estimates.
Investors can also leverage Impact Cubed’s granular products and services data to make more precise decisions when screening or excluding sub-industries from their portfolios. Our detailed classification system allows investors to identify and focus on specific sub-industries or business activities, rather than excluding entire industries due to a few poor-performing companies. This enables a more targeted and nuanced investment approach, promoting the inclusion of responsible companies while avoiding those with undesirable ESG practices.
- Can Impact Cubed’s online analytics platform be used to analyse regional and geographic differences in ESG impact?
Yes, the platform allows users to analyse products and services revenues across regions and geographies, providing valuable insights into potential opportunities and risks associated with specific locations.
- How does Impact Cubed’s approach to ESG data contribute to positive change?
By providing accurate and granular data, Impact Cubed empowers investors to make better decisions that promote sustainable and responsible business practices, driving positive change within industries and companies.
- Is Impact Cubed’s products and services data available to all investors?
Impact Cubed’s groundbreaking products and services data is available on their online analytics platform, providing institutional investors with a new level of transparency and detail in exploring a portfolio’s products and services. It is also available by feed or API for easy integration into other platforms.