NEW YORK (April 7, 2020) – ISS ESG, the responsible investment arm of Institutional Shareholder Services Inc., today announced enhancements to the ISS ESG Country Rating, which provides fixed income investors with superior coverage of almost 100% of issued global sovereign debt. This is the first of several product enhancements this year, augmenting ISS ESG’s suite of solutions for fixed income, which support investors seeking to integrate ESG factors into the investment process and identify sustainability risks that may not be captured by conventional financial analysis.
The ISS ESG Country Rating provides more than 100 quantitative and qualitative rating factors for more than 120 countries. It includes industry leading coverage of corporate governance, environmental and social issues alongside history dating back to 2002, with sourcing from authoritative bodies including the World Bank, International Labor Organization, World Health Organization and others.
The ISS ESG Country Rating is delivered via ISS ESG’s proprietary DataDesk platform allowing for unrivaled customization of screens and ratings to suit an investor’s unique investment objectives.
“The ISS ESG Country Rating is an ideal complement to conventional financial ratings, providing high-quality, detailed analyses of the sustainability performance and risks of sovereign issuers globally,” said Marija Kramer, Head of ISS ESG. “By complementing traditional sovereign risk analysis with the ESG Country Rating, investors can identify material long-term country risk within their portfolios.”
For example, an analysis of ISS ESG Country Rating emerging markets data reveals that a number of countries with a good credit rating, such as Saudi Arabia, Kuwait, the UAE and China, have a poor ESG rating. While deemed financially stable relative to other markets, they lack democratic institutions and have questionable track records on human rights and environmental issues.
Conversely, ISS ESG Country Rating data highlights some emerging markets achieving relatively high ESG grades, most notably Costa Rica. Due to a stable political system, guarantees of human rights, as well as a strong environmental record, Costa Rica achieved a rating of B- and thus the “Prime” designation level, assigned to countries which reach 50 percent or more of the possible score.