Institutional Shareholder Services (ISS) announced today that its responsible investment arm, ISS ESG, has launched a new ratings platform to assess the ESG performance of investment funds. The new solution, ISS ESG Fund Ratings and Screening, will provide ratings for more than 20,000 funds globally.
ISS ESG’s new ratings solution is aimed broadly at financial investment professionals, from fund managers, who can use the platform to construct and optimize existing products, to advisors looking to identify funds that align with clients’ ESG preferences.
The new ISS ESG Fund Ratings and Screening is being introduced as investors increasingly demand sustainable investing solutions from investment managers, yet often find it difficult to assess the ESG performance of different funds, and particularly to compare funds on this basis. Many managers report integrating ESG considerations into their investment processes, but the degree of incorporation can vary greatly among managers and funds.
ISS ESG stated that the new solution will enable clients to quickly and effectively evaluate and illuminate fund and peer performance across major ESG themes, by drawing on the service provider’s broad database that includes ESG ratings, governance data, norm-based research, energy and extractives screens, Sustainable Development Goals (SDG) impact ratings, carbon emissions analysis, and shareholder meeting voting outcomes. Using these resources, ISS ESG aims to provide a composite and holistic picture of a fund’s ESG performance.
Marija Kramer, Head of ISS ESG, said:
“ISS ESG continues to innovate and deliver to market cutting-edge solutions that draw on the industry’s deepest well of ESG data and a deliberate approach to product development. In keeping with our commitment to clients, this new solution will provide them a significant advantage over other offerings alongside unrivalled support from our client success teams.”
According to ISS ESG, the new solution will rate funds using a 1-to-5 star based system, along with providing an absolute score, and the fund’s Prime status, with relative scoring based on the fund’s standing within the Lipper Global Benchmark class. Additionally, ISS ESG will provide packages that go beyond core ESG Fund Ratings to include Sector Based Screen-aligned thematic data sets and SDG Solutions.