ISS ESG / RATINGS & RANKINGS
E&S DISCLOSURE QUALITYSCORE
Identify environmental and social risk within portfolio companies.
A data-driven scoring and screening solution designed to measure and identify areas of environmental and social risk through company disclosure.
Scores provide an indication of relative quality compared to industry peers and are supported by factor-level data that is critical to the research process.
E&S Disclosure QualityScore allows investors to identify leaders and laggards in the industry.
E&S Disclosure QualityScore measures and identifies risk in environmental and social areas of concern through thorough analysis of company disclosures. Scores can also indicate best-in class disclosure practices and save time in performing peer comparisons.
QualityScore in Practice
QUALITYSCORE IN PRACTICE
Identify best-in-class sustainability disclosure practices.
E&S Disclosure QualityScore provides transparency into the practices of public companies.
- Decile scores provide a snapshot view of risk
- Red flags identify the companies or behaviors in need of further analysis
- Supporting factor-level data and summary of key disclosure omissions provide critical insight
- User-friendly tools to screen and monitor potential risk in your portfolios
- Profile reports that highlight key facts to facilitate issuer engagement
- Ability to benchmark peers for deeper perspective
- Access to scores, data and screening through ISS’ proprietary platform, DataDesk, or through data feeds
Guiding Frameworks
GUIDING FRAMEWORKS
E&S Disclosure QualityScore methodology is based on guiding frameworks to support investor mandates to comply with emerging standards. The methodology focuses on material aspects of disclosure practices, including global disclosure standards and key industry initiatives.
Global Reporting Initiative (GRI)
Sustainability Accounting Standards Board (SASB)
Task Force on Climate-Related Financial Disclosures (TCFD)
Private-sector momentum behind the adoption of the United Nations’ Sustainable Development Goals (SDGs).
E&S Disclosure QualityScore provides data to assist investors and other stakeholders to align business models, products, and services with the global long-term agenda set out in the United Nations’ Sustainable Development Goals
- GOAL 6: Clean Water and Sanitation: Ensure availabsility and sustainable management of water and sanitation for all
- GOAL 7: Affordable and Clean Energy: Ensure access to affordable, reliable, sustainable and modern energy for all
- GOAL 12: Responsible Consumption and Production: Ensure sustainable consumption and production patterns
- GOAL 13: Climate Action: Take urgent action to combat climate change and its impacts
- GOAL 14: Life Below Water Conserve and sustainably use the oceans, seas and marine resources for sustainable development
- GOAL 15: Life on Land: Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss
Coverage
Industry Coverage
The coverage for E&S Disclosure QualityScore includes approximately 5,400 issuers across 24 industry groups in the Americas, European and Australasia regions.
- Automobiles & Components
- Banks
- Capital Goods
- Commercial & Professional Services
- Consumer Durables & Apparel
- Consumer Services
- Diversified Financials
- Energy
- Food & Staples Retailing
- Food, Beverage & Tobacco
- Healthcare Equipment & Services
- Household & Personal Products
- Insurance
- Materials
- Media
- Pharmaceuticals, Biotech & Life Sciences
- Real Estate
- Retailing
- Semiconductors & Equipment
- Software & Services
- Tech Hardware & Equipment
- Telecom Services
- Transportation
- Utilities
Data as of January 2023. All figures are approximate.
Methodology
The Methodology Behind the Scores
Similar to Governance QualityScore, E&S Disclosure QualityScore uses a numeric, decile-based score that indicates a company’s risk. Overall Environmental and Social scores indicate a company’s risk relative to their peers in their industry.
A score in the 1st decile (pillar score:1) indicates relatively better quality Environmental & Social practices and relatively lower Environmental & Social risk, and, conversely, a score in the 10th decile (pillar score:10) indicates relatively higher Environmental & Social risk.
Scores measure the depth and extent of a company’s transparency and disclosure to convey:
Understanding of its environmental and social risks.
A company’s preparedness to face and mitigate those risks.
Indication of a company’s commitment to being held accountable to those risks.
- More than 380 factors across the environmental and social pillars are analyzed. The specific factors under analysis – around 240 – vary by industry group.
- The factor selection and sector allocation has been informed by the recent developments in disclosure standards and frameworks, such as the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB) standards and the Task Force on Climate-related Financial Disclosures (TCFD).
- A materiality focus ensures that companies are compared only to peers in their industry group.
- Global comparability on core Environmental & Social factors enable investors to benchmark core Environmental & Social practices and risks for companies across markets and regions.
- Issuers are invited to review and verify their data through routine data verification.
- Year-round focus, with event-driven data updates for capturing changes to a company’s Environmental & Social structure on an ongoing basis.
DEEP DIVE INTO E&S DISCLOSURE QUALITYSCORE
RESEARCH, SCREEN & ANALYZE RISK
Investors can search, screen, and filter data in ways that suit their needs.
DataDesk
Use ISS’ proprietary DataDesk tool allows for insight into a company’s corporate environmental and social disclosures, quick drill-downs into particular areas of concern, and deep dives into underlying environmental and social data.
Data Feeds
Easily ingest the files through your own internal processes and highlight scores within internal workflow platforms.
E&S Disclosure QualityScore Profiles provide a summary of key disclosures, key disclosure omissions, an overview of disclosure and transparency risks and detail the factors used in determining the company’s scores.
Red flag identifiers highlight the areas raising the risk profile. Green stars indicate the areas of stronger disclosure practices.
DATA VERIFICATION
Review, verify, and provide feedback on the data used to determine the E&S Disclosure QualityScore.
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