ISS ESG - Climate Impact Report
Brief description of the data offering
ISS ESG's Climate Impact Report provides a holistic analysis of the carbon footprint, climate change preparedness, and climate-related impact of a clients' holdings, identifying reportable and actionable data for the formulation of climate-friendly investment strategies. Client portfolios are analysed for their greenhouse gas and fossil fuel exposure based on ISS ESG's comprehensive database of GHG emissions for more than 28,500 issuers, including listed equities, fixed income, and sovereign and corporate bonds. The report can assist investors in fulfilling requirements for internal and global external reporting initiatives such as the Task Force on Climate-related Financial Disclosures (TCFD), Article 173 of the French Energy Transition Law, and the PRI.
ISS ESG's Climate Impact Report includes the following elements:
- Carbon Footprint Metrics
- Sector analysis
- Attribution analysis
- Largest contributors
- Physical risks assessments estimating financial impact due to increasing hazard intensity for the most likely and worst-case scenarios by 2050 across the five most costly weather hazards: floods, heat stress, wildfires, tropical cyclones, and drought. The Physical Risk assessment now includes a Value-at-Risk which estimates the change in share price as a result of considering the financial impact of physical risks, leveraging proprietary valuation models based on the Economy Value (EVA) methodology.
- Scenario analysis, assessing the alignment of a portfolio with three climate scenarios provided by the International Energy Agency (IEA), including the Sustainable Development Scenario (SDS) that aligns with the Paris Agreement.
- Stress-testing: Analysing how different climate scenarios can impact the financial performance of a portfolio.
- New Climate Target Assessment, which gives an indication of how well companies are aligning with international climate goals, leveraging science-based and company-specific targets.
- Alignment with key disclosure frameworks
- Transition Climate Risk Analysis
- Green/Brown Share
- Power Generation Exposure
- Fossil Fuel Reserves and Potential Emissions
- Controversial Business Practices, including tar sands and arctic drilling
- Portfolio Carbon Risk Rating
Where and how do you source your data?
For scope 1 and 2 carbon emissions, ISS ESG collects self-reported GHG emissions data from publicly available sources, including corporate social responsibility reports, CDP, investor relations communications, websites and others. This data is assigned with a trust metric to indicate the quality of self-reported data.
For non-reporting companies, or those who report with a low trust metric, ISS ESG uses in-house emissions modelling methodology, allowing ISS ESG to calculate GHG emissions of companies based on those criteria most relevant to their line of business.
For scope 3 emissions data, ISS ESG uses in-house modelling system, which conceptually differentiates between emissions from upstream/downstream supply chains and emissions from the “use phase” of a company’s product or service.
Who are the data users?
Data is used by a broad range of institutional investors, asset managers, asset owners, fund managers, banks, government institutions, universities and research firms.
What is the cost for your data offering?
Pricing is based on the method by which data is delivered. ISS ESG can provide data via its proprietary platform, DataDesk, or via data feed. Pricing for this solution is available upon request.
What are the key attributes that differentiates the data you offer?
- On-trend analysis evolving with an ever-changing industry
ISS ESG has introduced several updates to its physical and transition risk data solutions including a Value at Risk as well as Scenario Analysis and Net Zero supporting data.
- A unique and sophisticated emissions modelling system
ISS ESG utilizes a sophisticated approximation system to estimate emissions, including over 800 climate-relevant sector and subsector-specific models, allowing ISS ESG to calculate the GHG emissions of companies based on those criteria that are most relevant to their line of business.
- Comprehensive Coverage
ISS ESG’s data base of GHG emissions contains more than 28,500 issuers across a range of asset classes including listed companies and issuers of corporate debt.
- Data Quality and Transparency
ISS ESG’s granular emissions modelling system was developed over three years with scientists from ETH Zurich. ISS ESG is committed to applying the highest standards of GHG accounting capabilities with unmatched breadth and depth of investments coverage, verification and approximation. Additionally, ISS ESG helps to ensure transparency by including a trust and quality rating for every data point.
ISS ESG has worked with financial market participants and governments to screen trillions of dollars in assets under management for their climate impact. ISS ESG partners with a wide range of other specialists on a non-exclusive base to complement our research and service with premier market offerings.
ISS ESG’s dedicated team of climate specialists are industry leaders on climate change issues. Members of the team have partnered in the 2° Investing Initiative, served as resources at various workgroups on financed emissions including the United Nations Environment Programme Finance Initiative, assisted in the development of ISO standards, and contributed to the works of the TCFD.
@ISSESG’s Climate Impact Report provides detailed analyses of Scope 1&2 and Scope 3 emissions, transition & physical risks and climate scenario analysis based on the International Energy Agency’s (@IEA) Sustainable Development Scenario: https://www.issgovernance.com/esg/climate-solutions/climate-analytics/