Institutional Shareholder Services’ (ISS) responsible investment arm, ISS ESG, announced today the launch of ISS ESG Scorecards, aimed at enabling financial institutions, including private equity firms, to conduct custom and comprehensive ESG performance and risk assessments of private companies, with use cases including assessment of ESG risk exposure of investee companies during due diligence processes for private equity portfolios, the evaluation of ESG risk during credit risk assessment, and the facilitation of engagement with companies regarding sustainability.
Kristina Rüter, Managing Director and Global Head of Methodology at ISS ESG said:
“The methodology takes into consideration the entire value chain and materiality is reflected in the configuration and weight of each element while standardized assessment factors facilitate consistent and comparable assessments.”
ISS ESG is launching 19 industry-specific scorecards, with more industries expected to be added in the future, facilitating industry-specific scoring of a private company’s ESG risk profile. Scorecards include an industry risk profile, including descriptions of key sustainability risks, as well as three, standard interactive scorecard elements covering Climate, Social, and Governance risks. The new tool also provides an interactive assessment focused on key issues that are both industry-specific and viewed as material, as well as a classification of the impact of a company’s products and services under the UN Sustainable Development Goals (SDGs) and information on the relevance of the EU Sustainable Finance Taxonomy.
Till Jung, Managing Director and Global Head of ESG Products at ISS said:
“Sustainability-related good practice frameworks and regulations are rapidly evolving and driving demand for ESG performance and risk assessments of private companies. Our decades-long ESG research and assessment experience reflected in the ISS ESG Scorecards enables industry-specific assessments that provide focus on the material issues most critical to clients.”