Tracking Companies’ Real Time Sustainability Trends: Cognitive Computing's Identification of Short-Term Materiality Indicators

23 Pages Posted: 27 Feb 2015

See all articles by Greg Bala

Greg Bala

TruValue Labs

Hendrik Bartel

Truvalue Labs

James P. Hawley

Saint Mary's College of California; TruValue Labs

Yung-Jae Lee

Saint Mary's College of California

Date Written: February 25, 2015

Abstract

The article argues that what as known as big data analytics using cognitive computing can be applied to sustainability (environmental, social and corporate governance) analysis. This can supplement what is now almost entirely done by human analysis, but this new technology is scalable and can create multiple real time data points (trends). Proprietary sustainability data analytics has been developed by a technology start up, TruValue Labs, Inc.. Using early data for a six month period, we have found statistically significant short term volatility variations correlated against what is called (and defined as) compounded TruValue (cTV), a sustainability indicator. This has been especially true in the E and S, and to a lesser degree, G areas. We argue that such short-term movement, previously undetected, and therefore not measured, has potential materiality (hence value) implications. The article sets the stage for these conclusions with a review of sustainability ratings and measurement systems currently in use, a brief review of cognitive computing, a discussion of materiality and sustainability as well as how TruValue data is generated.

Keywords: sustainability, big data, cognitive computing, ESG, materiality

JEL Classification: D60, D62, G19, G29, Z00

Suggested Citation

Bala, Greg and Bartel, Hendrik and Hawley, James P. and Lee, Yung-Jae, Tracking Companies’ Real Time Sustainability Trends: Cognitive Computing's Identification of Short-Term Materiality Indicators (February 25, 2015). Available at SSRN: https://ssrn.com/abstract=2570616 or http://dx.doi.org/10.2139/ssrn.2570616

Greg Bala

TruValue Labs ( email )

1700 Montgomery Street
San Francisco, CA 94111
United States

HOME PAGE: http://www.TruValueLabs.com

Hendrik Bartel

Truvalue Labs ( email )

660 Mission Street, 4th flr
San Francisco, CA 94105
United States

James P. Hawley (Contact Author)

Saint Mary's College of California; TruValue Labs ( email )

San Francisco, CA 94105
United States
510-928-1327 (Phone)

Yung-Jae Lee

Saint Mary's College of California ( email )

P.O. Box 4240
Moraga, CA 94575-4240
United States

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