Interactive Brokers Group. has been granted a patent for a computer-implemented method that evaluates stock portfolios based on environmental, social, and governance (ESG) criteria. The method facilitates portfolio rebalancing by providing actionable ESG data, enabling users to align investments with personal values through automated trading processes. GlobalData’s report on Interactive Brokers Group gives a 360-degree view of the company including its patenting strategy. Buy the report here.
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According to GlobalData’s company profile on Interactive Brokers Group, was a key innovation area identified from patents. Interactive Brokers Group's grant share as of July 2024 was 47%. Grant share is based on the ratio of number of grants to total number of patents.
Esg scoring for portfolio management and trading
The granted patent US12073469B2 outlines a computer-implemented method for electronic securities trading that integrates environmental, social, and governance (ESG) scoring. The method begins by determining the ESG impact effect for each security in a market participant's portfolio, utilizing impact scores based on selected impact values and their importance. It generates an ESG portfolio impact score and identifies alternative securities that align better with the participant's selected values, particularly when a current holding conflicts with those values. The system allows for a streamlined trading process where a market participant can swap conflicting securities for alternatives through a single user input, triggering automated buy and sell orders in electronic marketplaces. The ESG portfolio impact score is dynamically recalculated to reflect the changes made by the swap trade, providing real-time feedback on the impact of the transaction.
Additionally, the method incorporates non-standardized ESG data from multiple providers, allowing for a comprehensive assessment of securities across various ESG categories. Market participants can specify practices they wish to avoid, leading to the identification of conflicting securities in their portfolios. The patent also details how the ESG portfolio impact score can be mapped to a letter grade and how trades can be executed through market or limit orders. The process includes provisions for handling fees and executing trades in partial fills, ensuring flexibility in managing investments. Overall, the method aims to enhance the alignment of investment portfolios with the market participants' ESG values while facilitating efficient trading operations.
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GlobalData Patent Analytics tracks bibliographic data, legal events data, point in time patent ownerships, and backward and forward citations from global patenting offices. Textual analysis and official patent classifications are used to group patents into key thematic areas and link them to specific companies across the world’s largest industries.
