RepRisk interviews Xiangfeng Liu, Founder & CEO of QuantData
1. RepRisk: Please provide some insight into your specific role at QuantData and explain the work that you and your team do.
Xiangfeng Liu: I am the founder and CEO of QuantData. I used to work for Thomson Reuters and knew from the customers in developed markets that alternative data like ESG is increasingly critical for risk management and pricing. I founded the venture in 2018 and joined the UN PRI (Principles for Responsible Investment) the same year as the 9th signatory on the Chinese mainland. There are now a total of 63 signatories headquartered in China.
QuantData provides data and analytics services to help financial institutions make better investment decisions. We serve a wide range of clients such as buy side, sell side, professional services, and corporates across the US, Europe, and Asia. We’ve also built strategic partnerships with prestigious global service firms like Bloomberg, ICE, and RepRisk to serve financial market practitioners across the world.
2. RR: QuantData provides risk incidents in Chinese language for RepRisk*, ensuring all nuances and specialties for the market are accounted for. In your experience, how has ESG-related reporting developed over the past years and why do you think analysis in local languages is key to meaningfully detecting ESG risks?
XL: ESG proactive disclosures are getting better in terms of volume. For example, 80% of companies in the China Securities Index 300 issue CSR reports. However the quality is still far from perfect due to a lack of standardization, regulatory requirement, and third-party audits. For our financial institution clients, it’s not practical to just wait for a perfect ESG disclosure system like the financial accounting that we have today. They wouldn’t be able to meet the market demand on ESG investing, and would lose significant b usiness o pportunities. So, it’s crucial to build the capabilities to source ESG intelligence through various other channels like regulatory filings, news, and third party reporting, which are typcially in local language and in an unstructured format. QuantData built the technology infrastructure to cover a wide range of data sources, and the result contributes to RepRisk’s language and market coverage to support global investors. For example, on a daily basis, QuantData collects the environmental violations from 3,000+ public regulatory websites and maps the records to listed companies. Only with such data collection and analysis can financial institutions effectively detect ESG risk and make better, more informed decisions.
* RepRisk also conducts its own research in Chinese language since 2010.
3. RR: Would you please summarize the ESG market landscape of China, and the barriers and opportunities around ESG integration for companies investing or operating in China?