ESG Data Guide 2024

ISS STOXX - Ratings & Rankings

Data category

  • Environmental data
  • Governance data
  • Indices/Exchange data
  • Rankings
  • Ratings
  • Research data
  • Social data
  • Verification/Certification/External opinion

The data offers solutions for:

  • Environmental impact analysis and insight
  • Investment decisions and portfolio insight
  • Nature-based information
  • Nature-based information: Biodiversity
  • Nature-based information: Land use
  • Nature-based information: Oceans
  • Nature-based information: Water
  • Reporting: CSRD
  • Reporting: Impact
  • Reporting: Other Regulations
  • Reporting: TCFD
  • Reporting: TNFD
  • Reporting: UN SDGs
  • Social impact analysis and insight
  • Network security risk

Who are the data users?

  • Corporates
  • Financial institutions
  • Government
  • Investors
  • Trustees
  • Data is used by a broad range of institutional investors, asset managers, asset owners, fund managers, banks, government institutions, universities and research firms.

Where and how do you source your data?

Data is primarily sourced from publicly available information, including a company’s own disclosure and reporting, proxy statements, reputable news, governmental and international institutions, recognised international or local non-governmental organisations, and non-biased subscription databases such as the CDP.

During the ESG Corporate Rating process, considerable importance is attached to the dialogue with the company under evaluation. Every other year, ISS ESG provides companies with the opportunity to comment on and add to the provisional findings by submitting a draft rating report to the company for revision. After the period of consultation, the report is finalised, integrating the comments and additions that are deemed appropriate by the analyst in charge of the rating.

Cyber Risk Score

The Score is based on a combination of compiled information sourced from third parties (such as HG Data Insights and SpamHaus), as well as a deep database of historical cyber risk data (seven years), information collected by ISS ESG’s own efforts, across the entire global internet address space. This ensures a deep pool of information for research, allowing for scores to be generated for companies and organisations worldwide. The continuous collection of data on all organisations ensures the ability to assess the long-term behaviour of the subject organisation from the moment the score is requested.

EVA

EVA data is typically derived from company filings, as well as ongoing event-driven data updates as reflected in public disclosure, press releases and company websites. In addition, ISS subscribes to a number of critical, paid data services that is also factored into the EVA analysis.

What is the cost for your data offering?

Pricing for this solution is available upon request.

What are the key attributes that differentiate the data you offer?

ESG Corporate Rating

·         Sector-specific and materiality-focused approach. ISS ESG’s approach is sector-oriented; for each sector, a specific catalogue of indicators is selected, helping to ensure that the most material topics for each individual company are assessed.

·         Forward-looking performance assessment. The ESG Corporate Rating applies a mid- to long-term approach to materiality, providing investors with forward-looking information on risks and opportunities of investments before they materialize.

·         Granular and rule-based methodology. ISS ESG’s rating methodology follows clearly documented guidelines covering rigorous data collection process and peer review in addition to dialogue with rated issuers requesting feedback on all relevant information. Information provided by the issuer is reviewed, discussed with the company, and assessed according to strict evaluation rules. 

·         High level of detail and transparency. ISS ESG offers full transparency when it comes to sources of information and criteria weighting underlying the ESG Corporate Rating, including all collected data at indicator level. Estimated data and disclosure ratio are available at a subcategory level.

 

ESG Country Rating

·         Profound Rating Methodology. The ISS ESG Country Rating framework includes more than 100 indicators holistically measuring performance against global best practices and material normative considerations. ISS ESG’s rating methodology follows clearly documented guidelines covering rigorous data collection process and peer review. 

·         Broad Coverage. The ISS ESG Country Rating provides a material assessment of the sustainability performance and risks of all EU, OECD and BRICS countries as well as all major sovereign issuers from the Americas, Europe, Asia, Africa, and Oceania. It includes 830+ sovereign issuers, which is approximately 100% of global sovereign debt issued.

 

Governance QualityScore

·         Presents at-a-glance governance rankings relative to index and region. Features company-level decile scores, presented as integers from 1 through 10, plus underlying category scores using the same scale that together provide a clear understanding of the drivers of a company’s governance risk. These scores provide an at-a-glance view of each company’s governance risk relative to their index and region. The individual factor breakdown takes a regional approach in evaluating and scoring companies, to allow for company-level comparisons within markets where corporate governance practices are similar.

 

E&S Disclosure QualityScore

·         Focus on materiality. Highlights industry-relevant issues, and aligns investors with leading market frameworks (TCFD, SASB). Key sustainable initiatives are universal, thematic and materiality focused. Quantitative and qualitative aspects of environmental and social disclosure practices are identified through a review of authoritative, investor-backed sustainability initiatives as well as recognized reporting standards and guidance.

 

Cyber Risk Score 

·         Concise, empirical, and proactive metric that seeks to convey how well a company manages and maintains its cyber security posture, powered by a machine learning model trained to identify the potential for a breach event over the next 12 months.

·         Understanding cyber risk accumulation/aggregation based on defined segments and scenarios and measure risk exposure associated with 3rd and 4th party dependencies (Cloud Service Provider and Technology Vendors)

·         Estimating Probable Maximum Loss scenarios and Disaster Scenarios based on defined requirements

 

SDG Solutions  

·         Holistic impact assessment. The SDG Impact Rating measures a company’s impact on the SDGs based on three pillars: products and services; operational management; and involvement in and responsiveness to controversies. This is based on a holistic understanding of impact acknowledging that companies can have both negative impacts and positive impacts in different SDGs.

·         Fully aligned with the SDG framework. Ratings are provided for each of the 17 SDGs, as well as at an aggregate level. Breakdown of products and services, operational impacts and controversies also provided for each of the seventeen SDGs.  

·         A granular bottom-up methodology with comprehensive evaluation guidelines. For each individual sustainability objective, a qualitative analysis is conducted to determine whether a product or service category makes a significant or limited net impact towards attaining the objective. 

·         A thematic approach weighing both positive and obstructing impact. ISS ESG’s impact analysis allows for a nuanced assessment of the sustainability quality of products and services. A given product category’s positive impact to the achievement of one objective can be displayed at the same time as its obstructing impact on the achievement of another objective. 

 

EVA Financial Data 

·         Superior to traditional measures of profit: EVA cuts through accounting distortions and charges for the use of capital 

·         Style agnostic: Provides an unbiased view of quality, value, and growth investment opportunities 

·         Leading indicators: EVA metrics could provide information that may lead to future stock prices 

·         Consistent, transparent framework: EVA is comparable across companies, industries and countries 

Most recent significant update:

Q3 2023 

Environmental & Social Disclosure QualityScore methodology update
ISS ESG introduced an enhanced methodology to its Environmental & Social Disclosure QualityScore solution, providing an improved measure of corporate disclosure practices and augmenting coverage of material issues. 

Planned future enhancements:

  • Fixed Income: New products and enhancements which will increase fixed income coverage overall and provide high-quality sustainability assessments at individual bond level.

What trends are you seeing in terms of customer demand?

ESG markets are widening and deepening. The role of ratings and scores are increasing especially in the widening area of the market where investors need quick and easy-to-implement solutions to address sustainable investment needs. For those investors deepening their sustainable investment efforts, ESG ratings and scores are being used increasingly as a benchmark to then potentially deviate from by adding custom emphasis and flavor in how the individual datapoints role up into a score.

Contacts

Till Jung
Head of ISS ESG
till.jung@iss-esg.com
+49.89.46.2248162