ICE and risQ launch new service for scoring social impact of investment

Intercontinental Exchange, Inc (NYSE:ICE) and risQ, a Boston-based startup focused on geospatial climate, economic and demographic data, today announced the launch of a new data service that aims to allow users to understand and score the potential social impact of an investment.

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.

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.

Evan Kodra, CEO of risQ, says:

“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.”

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