Glass Lewis, the California-based proxy voting and governance research firm serving more than 1,300 investment managers and pension funds globally, has agreed a business combination with Clarity AI, the Madrid-rooted sustainability data and analytics provider founded in 2017.

The deal, announced Thursday, pairs Glass Lewis's governance and stewardship franchise with Clarity AI's machine-learning platform for analyzing extra-financial data, and the combined company will establish a global center of excellence for sustainability, data and AI innovation in Madrid.

For Glass Lewis CEO Bob Mann, the location "speaks volumes about the strategic importance of the European market and our commitment to it."

The pivot toward Europe carries commercial logic. More than 80% of global sustainable fund assets now sit in European funds, while Glass Lewis faces intensifying political pressure in the United States, where the Trump administration has ordered a crackdown on proxy advisors for supporting ESG and DEI positions and states such as Indiana have moved to mandate disclosures for proxy advice against management.

US clients are also building alternatives in-house: JPMorgan has replaced external proxy advisors with an internal AI platform, and Wells Fargo has launched its own in-house proxy voting system to cut reliance on outside advice.

Glass Lewis recently announced it will stop providing singular voting recommendations to clients as ESG preferences diverge between the US and Europe, and it has expanded beyond core proxy research into engagement tools, workflow software and climate strategy assessment.

Clarity AI, founded by Rebeca Minguela, uses big data and machine learning to deliver environmental and social insights for investors, asset owners, banks and corporates, supporting capital allocation, regulatory compliance and risk management. Its client base is heavily European, complementing Glass Lewis's US-weighted book.

In a statement, Minguela pointed to the combined research bench, noting that Glass Lewis brings "key members of the former Sustainalytics team who helped build one of the most respected sustainability research franchises in the world," which, combined with Clarity AI's technology, creates "a differentiated, integrated platform with deep decision-relevant data and unparalleled expertise."

The companies said institutional investors increasingly want investment analysis, sustainability, governance, engagement and voting managed in one system rather than through separate datasets and workflows, and the merger is designed to connect investment and stewardship decision-making more closely.

Mann added that all clients will benefit from accelerated AI-enabled product development and deeper data-driven insights, with particular emphasis on expanding products and services built for European clients.

No financial terms were disclosed. The transaction's next test is regulatory approval and the pace at which European institutional investors, working under evolving stewardship requirements, adopt the combined platform.