ESG Data Guide 2023

ISS ESG - Transition 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
  • Social impact analysis and insight

Who are the data users?

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

Brief description of the data offering

In order to better understand how a client’s investment universe is contributing to a transition towards a green economy, ISS ESG offers an analysis of the portfolio’s transition climate risks. This analysis combines various indicators and aggregates company specific information on the fossil fuel exposure of client’s holdings in the oil & gas, coal and utilities sectors. The Transition Risk Analysis contains the following elements:

  • Power Generation - Green/Brown Share and Overall Exposure
  • Fossil Fuel Reserves and Potential Emissions
  • Controversial Business Practices
  • Portfolio Carbon Risk Rating

ISS ESG recently launched the ISS ESG Transition Value at Risk (TVaR) Analysis, which helps investors assess their portfolio’s exposure to climate-related transition risks and opportunities. It provides forward-looking returns-based analysis, leveraging financial data and modelling via ISS ESG's EVA solution, company-specific data, and scenario inputs. The analysis is based on the IEA's SDS and NZE2050 scenarios.  These scenarios are part of the IEA’s World Energy Outlook series published annually, with the current data being based on the latest 2021 release. The corresponding temperatures are 1.65C and 1.5C at the 50% probability level, illustrating a potential future with a high level of transition risks.

The TVaR solution allows financial institutions to identify assets which may be most at risk from carbon pricing and demand changes, as well as those which may be better positioned to seize opportunities.

  • Value at Risk: Reveals the company’s value at risk per scenario.
  • Change in OpEx and Sales: Show the change in a company’s operating costs and sales at 5-year intervals up to 2050 compared to a non-transition scenario.

Where and how do you source your data?

Fossil fuel data is collected in-house from proprietary ISS ESG data sets. 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.

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@issesg now provides a Transition Value at Risk Analysis, which helps investors assess their portfolio’s exposure to climate-related transition risks and opportunities through a forward-looking, returns-based analysis.

#ESG #ResponsibleInvesting

Contacts

sales@iss-esg.com