BlackRock invests in data science & machine learning

By Georgia Wilson
BlackRock makes minority investment in Clarity AI to further its use of data science and machine learning to help clients develop sustainability insight...

In an announcement made by BlackRock, the company has reported for an undisclosed amount its minority investment into Clarity AI. The investment comes as part of BlackRock’s efforts to further its use of data science and machine learning to help clients develop sustainability insights.

Who is Clarity AI?

Clarity AI - founded in 2017 - is a sustainability analytics and data science platform that, “aims at contributing to a more socially efficient capital allocation by providing decision makers with the most reliable and comprehensive tools to understand and optimise social and environmental impact, leveraging scientific research and the latest technologies.”

Creating actionable sustainability and impact insights using Big Data and machine learning (ML), Clarity AI’s capabilities will be integrated into BlackRock’s end-to-end operating system for investment professionals as part of the investment.

Clarity AI's, proprietary technology and data science capabilities analyse more than 30,000 companies, in almost 200 countries.

“Investors are galvanized around sustainability as a critical consideration in managing immediate and future risks, and better data is foundational to this. As BlackRock makes sustainability its standard for investing, we are committed to raising the standards for ESG data and technology. We’re investing in new analytics and software in Aladdin and are also integrating capabilities from strategic partners like Clarity AI so clients can understand their investments’ social and environmental impact and risks. Clarity AI’s capabilities use machine learning to help Aladdin clients analyze a broader universe of companies, address their disclosure obligations and build more sustainable portfolios,” commented Mary-Catherine Lader, Head of Aladdin Sustainability at BlackRock.

“BlackRock’s investment in Clarity AI and the integration of our capabilities and comprehensive ESG, sustainability and impact data into BlackRock’s Aladdin platform will be transformative, bringing Clarity AI data and analytics to more of the world’s largest and most significant investors. This strategic partnership with BlackRock reflects the growing demand for our innovative approach in helping investors assess the impact of companies on our society and planet,” added Rebeca Minguela, Founder and CEO of Clarity AI.

Blackrock states that it has experienced rapid acceleration in demand for sustainable investing, with global investors in mutual funds and ETFs investing US$326bn in sustainable assets between November 2019 and November 2020, a 97% increase over the same time period a year prior. 

In a recent study conducted by BlackRock titled, ‘Sustainability Goes Mainstream’ the company discovered that their allocations to ESG strategies are expected to double by 2025, with 53% of respondents citing concerns around ‘poor quality or availability of ESG data and analytics’ as their biggest barriers to adopting sustainable investing.

WIth this in mind BlackRock’s latest investment in Clarity AI is the latest step for its Aladdin platform as it strives to further its sustainability capabilities. Last year the company added 1,200 sustainability metrics and established data partnerships to help investors understand ESG and physical climate risks and opportunities.

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