ROCKVILLE, Md. (June 8, 2023) – ISS ESG, the sustainable investment arm of Institutional Shareholder Services, today announced planned methodology enhancements to its Environmental & Social Disclosure QualityScore solution for global institutional investors.
The planned enhancements, expected to take effect in the third quarter, will at a high-level provide an improved measure of corporate disclosure practices and augment coverage of material issues. The changes come against the backdrop of advances in industry disclosure standards.
More than 150 factors underlying the scoring will be revised for greater relevance, close to 50 factors retired, and more than 60 new factors will be added. These additions are driven by the expansion in coverage of corporate disclosures and the inclusion of new, material topics. As a result of this methodology update, the Environmental & Social Disclosure QualityScore will be supported by 360 comprehensive and refined factors. The update will also include a review of the model’s materiality assessment, comprising an adjustment of category and factor-specific weights to better capture the depth and the extent of corporate disclosures.
Topics and enhancements in scope include the following:
- Expansion of included topics to allow for more in-depth assessments of labor relations and occupational health disclosures.
- Improved tracking of disclosures in the areas of workforce diversity and equality, with the addition of gender pay gap factors.
- Enhanced assessment of disclosures concerning human rights for companies and their suppliers.
- Introduction of new participation factors in social and environmental initiatives and frameworks including Women’s Empowerment Principles, RE100, ILO 169, among others.
- Update to existing assessments of companies’ natural resources profiles.
- Increase in granularity of reviewing carbon- and climate-related disclosures.
A data verification period will run from July 10 to July 21, allowing companies to verify and submit changes to their data on all factors, including those added for this release, before scores are calculated and made available under the updated methodology. Access to the data verification portal is provided free-of-charge and available year-round.
To learn more about ISS ESG’s Environmental & Social Disclosure QualityScore, please click here.
About ISS ESG
ISS ESG solutions enable investors to develop and integrate sustainable investing policies and practices, engage on responsible investment issues, and monitor portfolio company practices through screening solutions. ISS ESG also provides climate data, analytics, and advisory services to help financial market participants understand, measure, and act on climate-related risks across all asset classes. In addition, ESG solutions cover corporate and country ESG research and ratings enabling its clients to identify material social and environmental risks and opportunities. For more information, please visit us at: www.iss-esg.com
Executive Director, Communications
Institutional Shareholder Services Inc.