M&A Deals Speed Up in the ESG Space

• Multiple M&A deals with ESG companies have gone underway in 2021

• What lies ahead for the future of ESG 

On June 29, JPMorgan Chase closed a deal to acquire OpenInvest, a San Francisco-based fintech startup. The move positions JPMorgan Chase to take advantage of the growing trend of sustainable investing. The recent acquisition is one of many within the ESG space. 

As sustainable investing continues to grow, how can the acquisition of OpenInvest be a way for JP Morgan to win the race towards sustainable investing? Before we dive in, we have to take a look at the history of recent M&A deals that have gone underway this year.

Other Sustainable M&A Deals within the Banking Industry 

2021 is shaping up to be a big year for the intersection of finance and sustainability. As more people have their eyes and values set on sustainability, financial institutions are making strides to increase their presence on the sustainability front. 

In January 2021, BlackRock Inc. announced a minority investment in Clarity AI, a New York-based sustainability analytics and data platform. The startup utilizes big data and machine learning to create sustainability insights and support regulatory ESG disclosure obligations. The most important part of this deal is the integration of Clarity AIinto BlackRock’s in-house platform Aladdin. 

In March 2021, Ethic Inc. — a tech-driven asset management platform based in New York — announced that it had closed $29 million in Series B funding. The platform allows advisors to personalize a given index to align with a client’s investments, values, and tax management preferences. Investors include Oak HC/FT as a leading investor for the round with participation from other big names such as Fidelity Investments, Kapor Capital, Nyca Partners, Sound Ventures, Thirdstream Partners, and Urban Innovation Fund. The company has seen an increase in its assets by tenfold since its last round of funding in 2019. 

What Lies Ahead For The Future of Sustainability

2020 has been a pivotal year for businesses and people around the world. Sustainable investing was once considered a niche trend and is now on everybody’s mind. The COVID-19 Pandemic has unearthed many topics that have and continue to be areas of concern. From extreme weather events to acts of racial injustice, people are paying attention to all aspects of diversity, inclusion, and social justice more than ever. As sustainability becomes more mainstream, 2021 has continued this momentum, with companies looking for ways to meet ESG goals. Fintech startups in the sustainability sphere are seeing tremendous growth. 

At Physis, we are experiencing this first hand. We recently launched the platform and have seen a huge growth in numbers. Staying ahead of the curve on ESG considerations is what we do. Here at Physis, we leverage data to help institutional investors understand, track, and measure the impact of investments. Join us today.

References:

JPMorgan is buying an ESG investing platform 

BlackRock announced a minority investment in Clarity AI 

Ethic Closes $29M Series B Round 

Ethic Secures $13M in Funding to Accelerate Transition to Sustainable Investing