Project: Sustainalytics roll-out of flagship ESG Risk Ratings
Sustainalytics launched its new materiality driven ESG Risk Ratings for investors in September 2018, making a step-change away from the firm’s previous stakeholder-driven ESG ratings approach. New ESG Risk Ratings were developed as a result of years-long input and feedback from clients, who expressed an increasing market demand for ratings with more of a materiality focus, deeper analysis and more flexibility in the use of ESG data. Investors informed the firm that they want insights that go beyond traditional company analysis, and thus a new generation of ESG ratings and tools were required.
With ESG-related considerations increasingly being integrated into investment processes, investors are seeking to better understand the ESG risk exposure facing specific companies and the companies within their portfolios. Sustainalytics’ ratings are designed to help equity and fixed-income investors identify and understand financially material ESG-related risks within their investment portfolios and assess how these risks might affect long-term investment performance. The ratings focus on the unmanaged risk of material ESG issues by assessing two dimensions, exposure and management, and consider a multitude of exposure-driving factors.
The groundbreaking two-dimensional materiality framework is a step-change in Sustainalytics ESG ratings approach, offering investors more meaningful ESG ratings that align to investors’ interests. They are fast becoming an industry standard.
Finalist: Inspirit Foundation
Project: 100% Impact Portfolio