ESG research and ratings provider Sustainalytics announced today the launch of Impact Metrics, designed to enable investors to systematically monitor, measure and report on the social and environmental impacts of their portfolios. The new tool also aims to help in the construction of portfolios, funds and indexes with impact objectives.
Impact Metrics are based on Sustainalytics’ new Impact Framework, which covers six impact themes that correspond to one or more of the Sustainable Development Goals (SDGs). According to Sustainalytics, the framework comprises two social areas and three environmental areas, including climate action, healthy ecosystems, resource security, basic needs, and human development. In addition, the framework includes a baseline theme, which addresses the indirect impacts an entity can have by way of its leadership and contribution to collective efforts. The firm’s Impact Framework dataset of 40 impact metrics spanning 12,000 companies can be adapted and used for various sustainability, impact, or disclosure approaches.
Sustainalytics stated that it is launching Impact Metrics as regulatory initiatives such as the EU Sustainable Finance Action Plan and the growing importance of issues like climate change and diversity are becoming key priorities for institutional and individual investors alike, placing more pressure on asset managers and owners to demonstrate how ESG-focused strategies can meet sustainability objectives.
Megan Wallingford, Associate Director of Product Strategy and Development at Sustainalytics, said:
“The use of ESG information has evolved rapidly over the last several years, from investors focusing on ESG integration to now demonstrating whether their ESG investments deliver real-world outcomes. Yet, measuring and reporting on positive and negative ESG outcomes has been difficult to-date given different interpretations on how to assess impact. With our Impact Metrics, we offer a structured set of product and operational metrics backed by a transparent framework that enables investors to understand, monitor, and show the impact of what companies produce and how they conduct their business.”