Glass Lewis & Co. is merging with European ESG data firm Clarity AI as investor demand for climate and sustainability risk management grows. The all-share merger closed Wednesday through a new holding company, with Clarity AI's European client base complementing Glass Lewis's existing markets, CEO Bob Mann said. The combined entity will integrate Clarity AI's ESG analytics platform with Glass Lewis's advisory services to "reframe the proxy voting industry," Mann stated.

The merger follows US restrictions on proxy advisers' ESG recommendations and Europe's regulations supporting low-carbon investments, highlighting divergent regulatory approaches between US and EU markets. Peloton Capital Management will retain majority ownership. Mann indicated the company will shift away from US house policies, requiring clients to develop their own voting guidelines while providing research context. Clarity AI's tools will enable tailored sustainability research for investors while expanding Glass Lewis's European presence through its data platform.