ISS ESG - Climetrics

Data category

Verification/certification data

What data do you provide?

Climetrics is the world’s first climate impact rating for funds, enabling fund investors to integrate climate change into their investment decisions. The Climetrics rating, which was introduced to the market in 2017 by ISS ESG in partnership with CDP, measures the climate risk and opportunities of a fund against other funds in its sample, represented by a 1-5 leaf rating, with five being the best. 

The scoring system is based on three quantitative layers of analysis:

  • Portfolio score measuring how well companies disclose and manage material risks and opportunities linked to climate change, water security and deforestation.
  • Asset manager score assessing an asset manager's level of public action to integrate climate change into their governance and investment processes.
  • Investment policy score rewarding funds with an explicit ESG policy and those carrying a European SRI label.

This results in an overall score for each fund, which is compared to all scored funds and then assigned a final 1-5 leaf rating. An above average Climetrics rating (4 or 5-leaf rating) indicates that, on average, the companies in a fund‘s portfolio are more carbon efficient, better at publicly disclosing and managing climate-related risks and opportunities, and more likely to deploy key technologies supporting the energy transition. Subscribers to Climetrics receive a rating license, enabling them to publicly display the climate rating of its investment funds to clients and other stakeholders.

The Climetrics product family includes the following:

  • Fund ratings data feeds covering 15,000 individual funds
  • Climetrics label license, promoting a fund’s climate performance
  • Climetrics company scores for over 6,000 corporate issuers
  • Customised portfolio screening service

Where and how do you source your data?

Funds are scored across three different levels, each focusing on a different aspect of the investment process. The primary focus is on the climate risks and opportunities of the individual holdings within each fund. This is to assess actual investment decisions taken by the funds regarding climate change. To assess a fund’s holdings with respect to their climate risks, a bespoke scoring methodology for companies was developed for Climetrics.

Besides the holdings analysis, the Climetrics scoring methodology also includes an assessment of the asset manager’s public action on climate change and rewards funds which have an explicit socially responsible investment policy. This intends to address different aspects of the investment process.

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?

  • Robust rating methodology. The Climetrics scoring system, which was developed in partnership with CDP, looks inside each fund, measuring its portfolio holdings' exposure to climate risks and opportunities, as well as the fund’s investment policy and the asset manager’s public action on climate change. This robust methodology helps investors identify top-rated funds invest in companies that are better at managing material ESG issues.
  • Alignment with key climate disclosure frameworks. The Climetrics system is strongly aligned with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). It integrates TCFD-aligned CDP scores for companies in its evaluation of portfolio holdings, and tracks asset managers’ TCFD-based reporting through the PRI reporting framework. Additionally, the integration of water security and deforestation data in the Climetrics rating is consistent with the emphasis on natural capital disclosure in the EU’s guidelines for reporting climate-related information and the Climate Disclosure Standards Board framework (CDSB).
  • Expertise. 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.

Tweet

Integrate #ClimateChange into your investment decision with @ISSESG’s Climetrics, the world’s 1st climate rating for funds. The rating gives an overall score based on 3 pillars: a fund’s portfolio, its investment policy, & the asset manager’s governance: https://www.issgovernance.com/esg/climate-solutions/climetrics/

Contacts

Maximilian.Horster@iss-esg.com

Corporate Statements

Turning knowledge into action

Maximilian Horster, head of ISS ESG, foresees several trends will shape the environmental, social and governance (ESG) investment space over the next 12 months. Environmental Finance spoke with him to see how ISS ESG is tailoring its data, index and reporting solutions as a result

Guide entries

Bespoke Research & Advisory Solutions

Carbon & Climate Data

Carbon Footprint Report

Carbon Risk Rating

Climate Advisory Services

Climate Impact Report

Climate Voting Policy

Climetrics

Controversial Weapons Research

Country Controversy Assessment

Custom Climate Voting Factors

Custom Rating

Director and Board Data

Energy & Extractives Screening

Environmental & Social Disclosure QualityScore

ESG Corporate Rating

ESG Country Rating

ESG Fund Rating

ESG Index Solutions

ESG Portfolio Analysis

ESG Raw Data

ESG Scorecard

EU Taxonomy Alignment Solution

EVA

Executive Compensation Data & Profiles

Global Sanctions Screening

Governance QualityScore

Norm-Based Research

Pooled Engagement

Potential Avoided Emissions Data

Responsible Investment Policy Development

SDG Impact Rating

SDG Solutions Assessment

Second Party Opinion

Sector-Based Screening

SFDR Principle Adverse Impacts Solution

Shareholder Meeting Results

Stewardship Toolkit