ESG Data Guide 2023

ISS ESG - Climate Physical Risk

Data category

  • Environmental data
  • Research data

The data offers solutions for:

  • Carbon footprinting
  • Climate scenario analysis
  • Environmental impact analysis and insight
  • Investment decisions and portfolio insight
  • Reporting: CSRD
  • Reporting: Impact
  • Reporting: TCFD

Who are the data users?

  • Corporates
  • Financial institutions
  • Government
  • Investors
  • Trustees
  • Index providers

Brief description of the data offering

The ISS ESG Climate Physical Risk solution assesses company exposure to physical risks by simulating the impact of the six most costly hazards (tropical cyclones, coastal and river floods, wildfires, heat waves, droughts) on companies’ operations and sales. The analysis is based on granular information about companies' geographical footprint, e.g., where in the world companies have production facilities and where they are generating revenue. The results show the potential financial Value at Risk of physical risks in three scenarios: historical, most likely, and worst case.

The ISS ESG physical risk solution provides metrics on both corporate and portfolio level that can be used by the investor to gain an understanding of the physical risk exposure of a portfolio or individual holding.

The key factors provided are:

  • Physical risk score per hazard and scenario: The physical risk score shows the company risk exposure. Risk exposure is defined as the overall financial impact of physical risks due to climate change on the company relative to its sector. The physical risk score expresses the change in risk between a historical scenario and a future scenario.
  • Value at Risk per hazard and scenario: In addition to the physical risk score, metrics are available showing the companies Value at Risk (VaR) as a result of physical climate risks. ISS ESG assesses the company’s VaR based on the ISS ESG proprietary Economic Value Added (EVA) model, which looks at the value of a company from an investor’s rather than an accounting perspective.
  • Management score for overall physical climate risk management: In addition to the risk exposure, each company is also given a physical climate risk management score. The management score shows if the company has taken physical climate risk into consideration in their risk management strategies.  

Where and how do you source your data?

Hazard data comes from the IPCC scenarios, geolocation data and financial data is collected in-house and/ or procured externally.

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  Value at Risk and Net Zero Solutions.

  • A unique and sophisticated emissions modelling system

ISS ESG utilizes a sophisticated approximation system to estimate emissions, including approximately 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 35,000 issuers across a range of asset classes as of March 2022, 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.

  • Experience

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.

  • 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

The @issesg Climate Physical Risk solution assesses company exposure to physical risks by simulating the impact of six costliest hazards (tropical cyclones, coastal/river floods, wildfires, heat waves, droughts) on companies’ operations and sales.

#ESG #ResponsibleInvesting

Contacts

sales@iss-esg.com