U.S. brokerage Cowen (COWN.O) said on Monday it would become the first major Wall Street firm to provide an environmental, social and governance (ESG) score on each of its company equity reports.
The announcement comes as more investors look to assess the potential impact on a company's value of issues as wide ranging as carbon emissions, worker relations and boardroom diversity.
Cowen said it would use technology and data from third-party ESG specialist Truvalue Labs, which deploys artificial intelligence to assess more than 100,000 sources of information that can help give a steer on potential issues and controversies in real time.
The score would be presented to clients on a scale of 1 to 100, with 50 being neutral, and above being positive.
"ESG factors have become a critical component of the investment process and there is a distinct need to have a solution set that can address the volume of information involved and standardisation needed to have a clear view of corporate progress," Robert Fagin, Cowen's Director of Research said in a statement.
The scores would be made available to Cowen's team of 55 analysts from Monday, with coverage expected for all the companies it analyses, except those for which sufficient ESG data is not available.
While the score would be available to analysts and clients alike, Fagin told Reuters there was no hard and fast rule for how the ESG score would be reflected in recommendations to clients.
"We're encouraging our analysts to look deeply into the data and incorporate ESG thinking into their overall picture, but there's no particular formula that we've mandated in terms of how they do that."
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