The $74.9 billion Boston-based Massachusetts Pension Reserves Investment Management Board has partnered with the state treasurer's office and MIT's Sloan School of Management to launch the Aggregate Confusion project, an initiative designed to improve how environmental, social and governance data in the investment and financial sectors are measured.
The Aggregate Confusion project seeks to expand upon the research from MIT Sloan's Sustainability Initiative "to improve the quality of ESG measurement," said a news release issued by state Treasurer and MassPRIM Chairwoman Deborah Goldberg.
"We believe companies that operate with consideration to ESG issues are higher quality investments that make a positive impact in the community and yield better performance over the long term," Ms. Goldberg said in the release. "This collaboration will improve MassPRIM's ability to rate a company's ESG impact by providing us with the most current research and enhanced methods for measuring ESG factors when evaluating investments."
Although there is roughly $30 trillion in assets globally that rely on ESG data, measurement and ratings on ESG performance is inconsistent, which can post a challenge for firms and pension plans looking better integrate ESG into their investment processes.
Through the partnership, MassPRIM will help inform research questions and methodology for the MIT research team and serve as a testing ground for new approaches to ESG matters.
"We believe we can do better in evaluating companies' ESG performance, and through this relationship with MIT we will have access to the best talent and researchers studying ESG measurement and ratings," added Michael G. Trotsky, executive director of MassPRIM, in the release. "This is a unique opportunity to work with one of the most prestigious research universities in the world and have early access to this important set of data."